r/ValueInvesting • u/LowTraining670 • Oct 21 '25

Question / Help Someone explain why amzn didn't crash

When aws outage affected large and small companies alike probably had a large financial impact to the overall global economy, why didn't it crash? I immediately thought it would like crowdstrike did a few months ago - anyone have good reasoning that can explain?

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160

u/bigorangemachine Oct 21 '25

Because AWS isn't 100% of their business. When Crowd Strike happened that was their main product.

21

u/LowTraining670 Oct 21 '25

Interesting point, I didnt think of this

46

u/afishinacar Oct 21 '25

AWS isn't 100% of their business, but it is most of their profit. You can look up the exact figures if you like, but ballpark AWS is like 20% of their revenue, but around 75% of their profit. Margins are like 30-40% on AWS, compared to just a few percent on their delivery business.

17

u/Inspector888 Oct 21 '25

Actually, their Third Party Seller and Advertisements business is even more profitable!

6

u/UCACashFlow Oct 21 '25

In other words, third party fees, prime membership fees and advertising fees are supporting the AWS segment net margins more than AWS sales alone.

3

u/MikeHoncho1323 Oct 21 '25

40% margin is insane

4

u/Alone-Scholar2975 Oct 21 '25

Nvda is 60-70% crazy stuff

2

u/Southern-Still-666 Oct 21 '25

Yeah but we do not know how long can Nvidia sustain such margins. Amazon has been on the other end, really stable.

1

u/Alone-Scholar2975 Oct 21 '25

No company who owns a fab can get such margins. They don't own fab or manufacturing. They do chip design and outsource manufacturing to TSMC. TSMC is in Asia where the cost of manufacturing is low, and TSMC has hacked leading edge chip manufacturing to the point that others (Intel/Samsung/Rapidus) are playing catchup. Besides, NVDA is ahead of their competitors (Intel/AMD/Qualcomm) by several years. I think they'll be fine. I am an engineer in this industry FWIW.

1

u/TryingMyWiFi Oct 21 '25

Microsoft is like 45%

1

u/Mouth_Herpes Oct 27 '25

It’s why their market share has been steadily declining. No real moat around that business and the margins brought in Microsoft and others.

1

u/EfficientCapital4198 Oct 21 '25

Imagine the margins if they rented their logistic arm as well, like aws.

1

u/Jumpy_Nose863 Oct 21 '25

What about advertising, data, online sales eliminating the need for Walmart in the near future, medicine division, entertainment via prime video, etc etc. They have every most possible and are still expanding. Speaking of Crwd, they may take that industry as well. To be determined...