Amazon.com, Inc. is a large technology and commerce company. It is known for online shopping, cloud computing, digital advertising, subscriptions, and related services.
Amazon’s stock ticker is AMZN. The shares trade on the Nasdaq stock exchange. A ticker is a short code used to identify a company’s stock.
This Amazon stock explained guide covers how the company makes money, why investors follow it, the financial numbers beginners should understand, and the main risks connected with its business.
What Is Amazon?
Amazon.com, Inc. operates businesses that connect shoppers, sellers, advertisers, software developers, and organizations.
Its best-known business is its online marketplace. Customers can buy products sold directly by Amazon or by independent sellers that use Amazon’s platform.
Amazon is also a major provider of cloud computing through Amazon Web Services, commonly called AWS. Cloud computing allows customers to use computing power, data storage, databases, and software tools over the internet instead of operating all the equipment themselves.
The company also offers advertising, entertainment, subscription, delivery, and device-related services. These activities make Amazon broader than a traditional retailer.
Amazon Stock at a Glance
| Official Company Name | Amazon.com, Inc. |
|---|---|
| Stock Ticker | AMZN |
| Exchange | Nasdaq |
| Broad Sector | Consumer discretionary |
| Broad Industry | Broadline retail, with major cloud computing and advertising operations |
| Main Business Activities | Online and physical retail, third-party seller services, cloud computing, advertising, subscriptions, and digital services |
A stock exchange is a marketplace where shares are bought and sold. Nasdaq lists many large technology and consumer-focused companies.
Sector and industry labels can vary between financial data providers. Amazon is commonly placed in consumer discretionary because retail spending is an important part of its business. However, AWS and advertising also give the company significant exposure to the technology industry.
How Does Amazon Make Money?
Amazon has several sources of revenue. Revenue is the total amount a company receives from customers before subtracting operating costs, taxes, and other expenses.
Products Sold by Amazon
Amazon buys some products from suppliers and sells them to customers. In this type of sale, Amazon earns revenue from the price paid by the shopper.
The company must manage product costs, warehouses, shipping, returns, and customer service. High sales do not automatically mean high profit because these activities can be expensive.
Services for Independent Sellers
Independent merchants can list products on Amazon’s marketplace. Amazon can collect fees for services such as product listings, order handling, payment processing, storage, and delivery.
These sellers provide a wider product selection without Amazon owning every item offered on the website.
Amazon Web Services
AWS sells cloud computing services to businesses, government organizations, software developers, and other customers.
Customers generally pay based on the services and computing resources they use. Examples include data storage, computing capacity, databases, analytics, and artificial intelligence tools.
Advertising
Businesses pay Amazon to display sponsored product listings and other advertisements. These ads can help sellers and brands reach shoppers who are already searching for products.
Subscriptions and Digital Services
Amazon earns subscription revenue from services that may include shopping benefits, digital entertainment, and other features. It also offers digital content, devices, and related services.
Main Business Areas
Online and Physical Stores
Amazon sells a wide range of goods through its websites, applications, and physical locations. This area serves individual consumers.
Its retail operations depend on product selection, pricing, inventory management, delivery speed, and customer service.
Third-Party Seller Services
Amazon provides a marketplace where outside merchants can reach customers. Sellers may also use Amazon’s warehouses and delivery network.
This business expands the marketplace’s selection. It also creates fee revenue for Amazon.
Amazon Web Services
AWS provides internet-based technology infrastructure. Customers can rent computing resources instead of buying and maintaining all their own servers and data center equipment.
AWS serves organizations ranging from small software developers to large enterprises and public-sector customers. Its performance can be affected by customer technology spending, competition, service reliability, and demand for newer tools such as artificial intelligence.
Advertising Services
Amazon’s shopping platforms give advertisers access to customers who may be considering a purchase. Advertisers pay for visibility on Amazon’s websites and other services.
Advertising results can depend on shopping activity, competition for ad space, privacy rules, and the effectiveness of Amazon’s advertising tools.
Subscriptions, Media, and Devices
Amazon offers subscription and entertainment services intended to keep customers connected to its wider business network. It also develops consumer devices and digital services.
These products can support customer loyalty, but they also require spending on technology, content, marketing, and product development.
Why Do Investors Follow Amazon?
Amazon receives attention because it participates in several large markets. These include online retail, cloud computing, digital advertising, logistics, subscriptions, and artificial intelligence services.
Investors often study the company’s retail sales and operating costs. Small changes in product costs, delivery expenses, or efficiency can matter when a business processes a large amount of customer activity.
AWS is also closely followed. Businesses increasingly use remote computing infrastructure, but the cloud market is competitive and changes quickly.
Amazon’s advertising operations provide another area to watch. Advertising demand can be affected by consumer activity, seller competition, privacy requirements, and wider economic conditions.
Market participants may also watch Amazon’s spending on data centers, warehouses, delivery systems, and artificial intelligence. Such spending may support future capacity, but it can require substantial cash before the benefits are known.
Key Numbers Beginners Should Know
Financial results describe a past reporting period. They are not the same as Amazon’s current stock price, and they do not guarantee future results.
| Financial Measure | Reported Figure | What It Means |
|---|---|---|
| Annual revenue | $716.924 billion for the fiscal year from January 1 through December 31, 2025 | This was the amount Amazon reported from customer contracts before subtracting expenses. |
| Diluted earnings per share | $7.17 for fiscal year 2025 | This represents reported profit allocated to each diluted share for the year. |
Amazon filed these fiscal 2025 figures in its annual Form 10-K on February 6, 2026.
Revenue
Amazon reported annual revenue of $716.924 billion for the fiscal year ended December 31, 2025. In simpler terms, that was about $716.9 billion in sales and service revenue before expenses were deducted.
Revenue shows the size of a company’s business activity. It does not show how much profit the company kept.
Diluted Earnings per Share
Amazon reported diluted earnings per share of $7.17 for fiscal year 2025.
Earnings per share, or EPS, is the amount of company profit assigned to each share. “Diluted” EPS assumes that certain securities, such as eligible stock awards, could increase the number of shares. A larger share count spreads profit across more shares.
Market Capitalization
Market capitalization is the total stock-market value of a company’s outstanding shares. It is usually calculated by multiplying the current share price by the number of shares outstanding.
Amazon’s market capitalization changes with its stock price and share count. No current market capitalization is stated here because it can change throughout the trading day.
Price-to-Earnings Ratio
The price-to-earnings ratio, or P/E ratio, compares a stock’s price with its earnings per share. Investors may use it to understand how the market price relates to reported earnings.
A P/E ratio can change as the stock price or earnings change. It should not be treated as a complete judgment about a company by itself.
What Could Affect Amazon?
Consumer Demand
Amazon’s retail activity depends partly on how much consumers spend. Inflation, employment conditions, household budgets, and consumer confidence can influence shopping behavior.
Cloud Computing Demand
AWS can be affected by customer technology budgets and demand for cloud services. Customers may reduce, delay, or expand their computing use as their needs change.
Competition
Amazon competes with retailers, online marketplaces, cloud providers, advertising platforms, streaming services, and logistics companies. Competitors may offer lower prices, different products, or new technology.
Operating Costs
Warehouses, transportation, employees, energy, digital content, and data centers can be expensive. Changes in these costs can affect profitability even when revenue grows.
Technology Changes
Cloud computing, artificial intelligence, online advertising, and digital commerce change quickly. Amazon must develop new services while maintaining existing systems.
Regulation
Amazon operates in many markets and countries. Rules involving competition, taxes, privacy, employment, product safety, and online marketplaces can affect how it operates.
Currency Movements
Amazon conducts business outside the United States. Changes in foreign currency exchange rates can change the U.S. dollar value of international revenue and expenses.
Key Risks
- Intense competition: Amazon faces competitors across nearly every major business area.
- Retail margin pressure: Product, labor, warehouse, delivery, and return costs may reduce the profit earned from retail sales.
- Large infrastructure spending: Data centers, technology systems, and fulfillment networks require substantial investment. Future demand may differ from expectations.
- Cloud service disruption: AWS customers depend on reliable service. Outages, security problems, or technical failures could affect customers and Amazon’s reputation.
- Cybersecurity and data privacy: Amazon handles large amounts of business and customer information. Security failures could create financial, legal, and reputational costs.
- Third-party seller issues: Unsafe, counterfeit, or incorrectly described products from outside sellers could lead to customer complaints or regulatory action.
- Regulatory scrutiny: Competition, marketplace, privacy, labor, and tax rules may change Amazon’s costs or business practices.
- Economic sensitivity: Weaker consumer or business spending could affect retail, advertising, and cloud demand.
- International exposure: Currency changes, local competition, political conditions, and different regulations can affect operations outside the United States.
Beginner Terms in This Article
- Ticker: A short code used to identify a stock. Amazon’s ticker is AMZN.
- Revenue: Money earned from sales and services before expenses are subtracted.
- Earnings per share (EPS): A company’s profit allocated to each share of stock.
- Market capitalization: The total stock-market value of a company’s outstanding shares.
- Price-to-earnings ratio (P/E ratio): A comparison between a stock’s price and its earnings per share.
- Trading volume: The number of shares traded during a particular period. High trading volume means many shares changed hands, but it does not show whether the stock will rise or fall.
- Fiscal year: A 12-month period a company uses for annual financial reporting.
- Form 10-K: An annual report filed with the U.S. Securities and Exchange Commission. It contains financial statements, business information, and risk disclosures.
FAQ
What does Amazon do?
Amazon operates online and physical retail businesses, a third-party seller marketplace, cloud computing services, advertising services, subscriptions, and digital products. Its cloud business is known as Amazon Web Services, or AWS.
What is Amazon’s stock ticker?
Amazon’s ticker is AMZN. Investors and financial websites use this code to identify Amazon shares.
Where is Amazon stock traded?
Amazon shares trade on the Nasdaq stock exchange.
How does Amazon make money?
Amazon earns revenue from product sales, seller fees, cloud computing, advertising, subscriptions, and other services. Each activity has different customers, costs, and business risks.
Does revenue mean profit?
No. Revenue is the amount earned before expenses are deducted. Profit is what remains after applicable costs, interest, taxes, and other expenses are considered.
What are Amazon’s main risks?
Important risks include competition, high operating and infrastructure costs, technology failures, cybersecurity problems, regulation, weaker consumer demand, and changes in cloud computing demand.
Key Takeaway
Amazon is a commerce and technology company that trades under the ticker AMZN. It makes money from retail sales, third-party seller services, AWS, advertising, subscriptions, and related activities.
For beginners studying Amazon stock explained in plain language, revenue and diluted EPS are useful starting points. However, those figures describe past performance and do not predict future results.
Amazon’s results can be affected by consumer spending, cloud demand, competition, operating costs, technology changes, and regulation. Understanding both the company’s different revenue sources and its risks provides a clearer view of how the business works.
Sources
- U.S. Securities and Exchange Commission, Amazon.com, Inc. Company Facts, including fiscal 2025 revenue and diluted EPS data filed on February 6, 2026: SEC Company Facts for Amazon.com, Inc.
Disclaimer
This article is for general educational and informational purposes only. It is not investment, financial, legal, or tax advice. It is not a recommendation or solicitation to buy, sell, or hold Amazon stock or any other security or financial product.
Company information, financial results, market values, and business conditions can change over time. Investing involves risk, including the possible loss of principal. Readers should verify current information through official sources, including company filings and investor relations materials.
Before making an investment decision, readers should consider their own circumstances, objectives, and risk tolerance. Professional financial, legal, or tax guidance may be appropriate when needed.
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