Amazon Expands Global Footprint: Will It Drive International Sales?

Core Insights - Amazon's international sales grew by 16% year-over-year to $36.8 billion in Q2 2025, surpassing North America's 11% growth, indicating strong momentum from its international expansion strategy [1][9] - The company's operating margin improved by 320 basis points, reflecting a strong quarter for both revenue and profitability [1] - The growth in international sales is projected to continue, with estimates of 8.4% growth in 2025 and 8.3% in 2026, supported by Amazon's expanding global reach and efficiency gains [3][4] International Expansion and Technology - The expansion of Prime Video advertising into markets like Brazil, India, Japan, the Netherlands, and New Zealand is enhancing monetization and user engagement [2] - Amazon is investing €700 million in European logistics and automation to improve delivery efficiency and lower long-term costs [2] - The company is leveraging AI-driven tools and robotics to streamline shopping experiences globally [2] Competitive Landscape - Walmart competes with Amazon by utilizing its physical retail dominance and grocery expertise, achieving a 10.5% sales growth in its international segment [5] - Microsoft poses a significant challenge to Amazon through its Azure cloud platform, focusing on enterprise integration and AI capabilities [6] Financial Performance and Valuation - Amazon's stock has returned 0.1% year-to-date, underperforming the Zacks Internet – Commerce industry and the Zacks Retail-Wholesale sector [7] - The stock is currently trading at a forward price/sales ratio of 3.07X, which is higher than the industry's 2.26X, indicating it may be overvalued [10] - The Zacks Consensus Estimate for Amazon's 2025 earnings is $6.76 per share, reflecting a 22.24% increase from the previous year [13]