AMAZON: Q4 OPERATING INCOME REFLECTS $730 MILLION IN ESTIMATED SEVERANCE EXPENSES AND $610 MILLION IN ASSET IMPAIRMENTS FROM PHYSICAL STORES - PRESENTATION
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2d ago
0mins
Should l Buy AMZN?
Source: moomoo
- Q4 Operating Income: Amazon's Q4 operating income includes an estimated $730 million in severance costs.
- Asset Impairments: The company reported $610 million in asset impairments related to physical stores.
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Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AMZN is 294.69 USD with a low forecast of 250.00 USD and a high forecast of 340.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
47 Analyst Rating
46 Buy
1 Hold
0 Sell
Strong Buy
Current: 222.690
Low
250.00
Averages
294.69
High
340.00
Current: 222.690
Low
250.00
Averages
294.69
High
340.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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AMAZON: Q4 OPERATING INCOME REFLECTS $730 MILLION IN ESTIMATED SEVERANCE EXPENSES AND $610 MILLION IN ASSET IMPAIRMENTS FROM PHYSICAL STORES - PRESENTATION
- Q4 Operating Income: Amazon's Q4 operating income includes an estimated $730 million in severance costs.
- Asset Impairments: The company reported $610 million in asset impairments related to physical stores.
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Investment Potential of Amazon and Booking Holdings
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- Booking Holdings' Sustained Growth: Booking Holdings recorded 323 million room nights in Q3, an 8% year-over-year increase, driving a 13% rise in revenue, with management targeting 8% annual growth in gross bookings and revenue, translating to a 15% increase in adjusted earnings per share.
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- Competitive Advantage Analysis: Although Microsoft does not separately disclose Azure's profits, its operating margins are estimated to be between 25% and 35%, which may be lower than Microsoft's overall operating margin of 47%, compared to competitors AWS and Google Cloud.
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- Market Competition Analysis: Although Microsoft does not disclose Azure's financials separately, its operating margins are likely between 25% and 35%, compared to competitors Amazon AWS and Google Cloud's margins of 35% and 24%, respectively, which may exert some pressure on overall profitability.
- Investment Opportunity: Microsoft's expansion in the cloud computing sector presents a significant market opportunity, especially as demand for AI surges, leading enterprise clients to prefer renting data centers rather than building them, thus fueling Azure's rapid growth.
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Impact of Results: The decline in stock price is attributed to investor reactions to the company's financial results and spending plans.
See More
AMAZON: Q4 OPERATING INCOME REFLECTS $730 MILLION IN ESTIMATED SEVERANCE EXPENSES AND $610 MILLION IN ASSET IMPAIRMENTS FROM PHYSICAL STORES - PRESENTATION
- Q4 Operating Income: Amazon's Q4 operating income includes an estimated $730 million in severance costs.
- Asset Impairments: The company reported $610 million in asset impairments related to physical stores.
See More
Investment Potential of Amazon and Booking Holdings
- Amazon's Market Advantage: Amazon's competitive edge in e-commerce stems from its extensive infrastructure and same-day delivery services, with its Rufus AI shopping assistant reaching 250 million active users in Q3, projected to generate $10 billion in incremental annual sales by 2025, further solidifying its market leadership.
- Advertising Revenue Growth: Amazon's advertising services have an annual revenue run rate of $85 billion, with Q4 ad revenue increasing by 22% year-over-year, as brands shift ad spending to digital platforms, significantly enhancing its overall profitability.
- Strong Cloud Computing Business: Amazon Web Services (AWS) saw a 24% year-over-year revenue increase in Q4, contributing nearly half of the company's profits, with investments in custom chips and data center capacity maintaining its competitive edge in the AI services market, expected to continue driving profit growth.
- Sustained Growth for Booking Holdings: Booking Holdings recorded 323 million room nights in Q3, an 8% year-over-year increase, driving a 13% rise in revenue and a 19% increase in adjusted earnings per share, with plans to achieve 8% annual growth in gross bookings and revenue, reflecting strong market demand and pricing power.
See More
Investment Potential of Amazon and Booking Holdings
- Amazon's Innovation Edge: Amazon's online retail business maintains a competitive advantage through its extensive infrastructure and same-day delivery, with its Rufus AI shopping assistant reaching 250 million users in Q3 and projected to generate $10 billion in incremental annual sales by 2025.
- Advertising Revenue Surge: Amazon's advertising services have achieved an annual revenue run rate of $85 billion, with Q4 ad revenue increasing by 22% year-over-year, positioning the company favorably as brands shift ad spending to digital platforms.
- Cloud Services as Profit Engine: Amazon Web Services (AWS) saw a 24% year-over-year revenue increase in Q4, contributing roughly half of the company's profits, with investments in custom chips and data center capacity keeping it at the forefront of AI service delivery.
- Booking Holdings' Sustained Growth: Booking Holdings recorded 323 million room nights in Q3, an 8% year-over-year increase, driving a 13% rise in revenue, with management targeting 8% annual growth in gross bookings and revenue, translating to a 15% increase in adjusted earnings per share.
See More
Microsoft's Cloud Computing Drives Market Performance Potential
- Stock Price Pressure: Microsoft has had a rough start to 2026, with its stock down 11% year-to-date, including a 10% drop in a single day following its second-quarter earnings report, complicating its ability to outperform the market this year.
- Cloud Growth Potential: Azure, Microsoft's cloud computing division, achieved a remarkable 39% revenue growth in Q2 2025, while the overall growth rate was 17%, underscoring the central role of cloud computing in the company's strategy.
- Competitive Advantage Analysis: Although Microsoft does not separately disclose Azure's profits, its operating margins are estimated to be between 25% and 35%, which may be lower than Microsoft's overall operating margin of 47%, compared to competitors AWS and Google Cloud.
- Future Outlook: With the ongoing demand for cloud computing, Microsoft is positioned to achieve stronger market performance in the coming years through its Azure platform, despite current stock price pressures, as the potential of cloud computing remains a key to its strategic success.
See More
Microsoft's Azure Cloud Computing Grows Rapidly
- Azure Growth Momentum: Microsoft's Azure cloud computing division achieved a remarkable 39% revenue growth in Q2 2025, highlighting its critical role in the company's overall 17% growth, indicating that cloud computing will continue to drive Microsoft's future development.
- Market Competition Analysis: Although Microsoft does not disclose Azure's financials separately, its operating margins are likely between 25% and 35%, compared to competitors Amazon AWS and Google Cloud's margins of 35% and 24%, respectively, which may exert some pressure on overall profitability.
- Investment Opportunity: Microsoft's expansion in the cloud computing sector presents a significant market opportunity, especially as demand for AI surges, leading enterprise clients to prefer renting data centers rather than building them, thus fueling Azure's rapid growth.
- Stock Market Performance Challenges: Despite Microsoft's stock price dropping 11% at the start of 2026, Azure's strong growth could help it outperform the market in the future, particularly as the broader market has only risen by 1%, providing Microsoft with a chance to regain its market position.
See More
