Key Highlights

● AMZN shares closed down 0.05% at $251.40 on Monday, October 5, on 39.27 million shares, roughly normal Volume at 1.06 times average.

● Prime Big Deal Days, Amazon's second Prime Day-style sale of the year, runs from October 6 to October 7.

● Second-quarter net sales rose 20% to $200.6 billion, with AWS growing 37% to $42.2 billion and Operating Income climbing 43% to $27.5 billion.

● Third-quarter guidance calls for net sales of $197 billion to $202 billion and operating income of $22.5 billion to $26.5 billion.

Amazon (NASDAQ:AMZN) landed on Monday's list of the most actively traded US stocks mostly on its sheer size. The shares ended essentially unchanged, down 0.05% at $251.40, on 39.27 million shares, roughly normal volume at 1.06 times average according to market data. With a Market Value of about $2.71 trillion, even an ordinary day produces close to $9.9 billion in dollar volume, enough to rank 11th among US stocks.

What's driving the volume

There was no major Amazon-specific news on Monday to move the stock, and volume barely above its average confirms this was routine trading rather than a reaction to a catalyst. Dollar-volume rankings naturally favor trillion-dollar companies, and Amazon appears on them most days. The most visible company event was on the calendar rather than in the headlines: Prime Big Deal Days, Amazon's second Prime Day-style sale of the year, runs from October 6 to October 7, and the fall event is widely seen as the unofficial start of the holiday shopping season. Because it falls in the fourth quarter, it will not affect the third-quarter results expected around the end of October.

The broader tape was supportive but selective. The Nasdaq Composite rose 1.05% and the S&P 500 gained 0.66% as softer-than-expected jobs data reduced expectations for further Fed rate hikes, while chip and AI hardware names such as Nvidia (NASDAQ:NVDA) and Broadcom (NASDAQ:AVGO) led. At the same time, the 10-year Treasury Yield climbed to 5.31%, its highest level since 2002, which tends to weigh on long-duration Growth Stocks and on companies spending heavily on future capacity. Amazon, which sits between consumer retail and AI infrastructure, ended up in the middle. As of September 30, the stock was about 12% below its all-time high.

The business

Amazon runs three large businesses under one roof. Its North American and international retail operations sell goods directly and through third-party sellers, and generate subscription income from Prime. Amazon Web Services is the world's largest Cloud Computing provider and produces the majority of the company's profit. Advertising, which places sponsored products in search results and ads in Prime Video and live sports, has become a third major engine. Increasingly, the company is also selling AI capabilities, from its own custom chips to access to large language models through AWS.

Andy Jassy has said AWS could eventually become a trillion-dollar Revenue operation as more workloads move to the cloud, and Amazon's custom chip Business has reached an annual revenue run rate of $25 billion. Those ambitions explain why investors now value Amazon at least as much on its cloud and AI prospects as on its retail franchise, and why the stock increasingly trades alongside other AI infrastructure spenders rather than with traditional retailers.

Recent results and guidance

Second-quarter results, released July 30, showed a business accelerating where it matters most. Net sales rose 20% to $200.6 billion. North America grew 16% to $116.2 billion, international rose 15% to $42.2 billion, and AWS jumped 37% to $42.2 billion, which CEO Andy Jassy called its fastest growth in 18 quarters. He added that Amazon's AI and chips businesses had each surpassed annual run rates of more than $25 billion. Advertising revenue rose 26%. Operating income climbed 43% to $27.5 billion, with AWS contributing roughly $16.6 billion, about 60% of the total.

Net income of $62.6 billion, or $5.75 per diluted share, was swollen by $53.4 billion of non-operating gains tied to Amazon's investments in Anthropic. That matters for valuation.

For the third quarter, Amazon guided to net sales of $197 billion to $202 billion, growth of 9% to 12%, and operating income of $22.5 billion to $26.5 billion. The sales comparison is distorted by calendar timing: Amazon held its summer Prime Day in late June this year, in the second quarter, rather than in July as in 2025. The company said growth would be about 4 percentage points higher excluding that shift. The midpoint of operating-income guidance implies profit growth of about 40% even on low-double-digit sales growth.

The cost of the AI build-out is the main concern. Trailing 12-month free Cash Flow was negative $7.6 billion, as Capital spending of about $169 billion exceeded Operating Cash Flow of $161.4 billion.

Valuation

Amazon's trailing P/E of 20.22 looks modest next to Microsoft (NASDAQ:MSFT) at 29.27 and Meta (NASDAQ:META) at 27.95, and slightly above Alphabet (NASDAQ:GOOGL) at 17.27. But the headline multiple understates the price of the core business, because trailing Earnings include the large Anthropic-related gains rather than recurring operating profit. Stripping those out would push the multiple meaningfully higher. The P/E had fallen as low as 18.2 in late July before the stock recovered, and the 52-week range runs from $196 to $287.20.

Bull case

● AWS growth of 37% shows Amazon is capturing a large share of AI infrastructure demand, with custom chips adding a second leg.

● Advertising is growing quickly and carries high margins.

● Guidance implies operating income growing far faster than sales, pointing to continued Margin expansion.

Bear case

● Negative trailing free cash flow leaves little room for error if AI Demand cools or pricing softens.

● Higher Treasury yields raise the hurdle for long-dated returns on Data Center spending.

● Headline earnings are inflated by Investment gains, so the stock is less cheap than its P/E suggests.

Prime Big Deal Days and the earnings test ahead

In the near term, early read-throughs from Prime Big Deal Days on October 6 and 7 will offer a first look at holiday-season consumer demand, though Amazon rarely discloses detailed sales figures for the event. The bigger catalyst is third-quarter earnings. A late-October date has circulated on data services, but it is an estimate rather than an Amazon confirmation.

Investors will watch AWS growth and backlog, the pace of capital spending and any update to full-year investment plans, advertising growth, and whether operating income lands near the top of the guided range. Commentary on fourth-quarter guidance, which will include the October event and the holiday season, will set the tone for the stock into year-end. Mark-to-market changes in the Anthropic stake can swing reported earnings in either direction, which keeps the headline P/E a moving target.