Investment Rating - The report assigns an "Buy" rating for the company, marking its first coverage [1]. Core Insights - The company's e-commerce growth remains resilient, and AWS revenue is accelerating [1]. - In Q3 2025, the company reported revenues of $180.2 billion, a year-over-year increase of 13%, exceeding Bloomberg's consensus estimate by 1.3% [3]. - The company expects Q4 2025 revenues to be between $206 billion and $213 billion, reflecting a year-over-year growth of 10% to 13% [3]. Revenue Performance - In Q3 2025, the breakdown of revenue by business segment shows: - Online store revenue of $67.4 billion (YOY +10%) - Physical store revenue of $5.6 billion (YOY +7%) - Subscription services revenue of $12.6 billion (YOY +11%) - Advertising services revenue of $17.7 billion (YOY +24%) - Third-party seller revenue of $42.5 billion (YOY +12%) [5]. - North America business revenue reached $106.3 billion (YOY +11%), while international business revenue was $40.9 billion (YOY +14%) [5]. AWS Performance - AWS achieved revenue of $33 billion in Q3 2025, marking a year-over-year increase of 20%, the largest growth since 2022 [5]. - AWS operating profit was $11.4 billion (YOY +9%), driven by strong growth in AI and core services [5]. Capital Expenditure and AI Development - Capital expenditures in Q3 2025 were $34.2 billion, a year-over-year increase of 61%, primarily invested in data centers and chips for AI model development [5]. - The company anticipates total capital expenditures for 2025 to be approximately $125 billion, exceeding market expectations of $118.8 billion [5]. Financial Projections - Revenue projections for 2025-2027 are $711 billion, $800 billion, and $900 billion, respectively, with corresponding net profits of $76.5 billion, $87.9 billion, and $108.9 billion [8]. - The report estimates a P/E ratio of 35.5x for 2025, decreasing to 24.9x by 2027 [8]. Valuation - Using the SOTP valuation method, the target market capitalization for the company in 2025 is set at $308.89 billion, with a target price of $289 per share [8]. - The company maintains a strong competitive position in global e-commerce, supported by its FBA fulfillment and Prime membership systems [8].

Core Points - The FTC's investigation into Amazon began in 2023, focusing on two main allegations regarding violations of consumer rights and choices [1] - Amazon has agreed to a settlement totaling $2.5 billion (approximately 178.24 billion RMB), which will be divided into two parts [1] - Internal documents revealed that Amazon executives were aware of the non-compliance issues related to subscription and cancellation processes [1] - Amazon's subscription business has been described internally as a "dark world," with misleading practices identified as a systemic issue [1] Settlement Details - The settlement includes a civil penalty of $1 billion (approximately 71.3 billion RMB), marking the largest fine ever imposed by the FTC in similar cases [1] - An additional $1.5 billion (approximately 106.95 billion RMB) will be allocated for consumer compensation, benefiting around 35 million consumers affected by involuntary registrations or delayed cancellations [1] - The FTC's consumer compensation amount is the second highest in its history [1] Company Response - An Amazon spokesperson stated that the company has always complied with the law and views the settlement as a way to move forward and focus on innovation for customers [1] - The company has not yet disclosed the specific process for affected users to claim the $1.5 billion in compensation, but plans to release this information soon [1]