Why I Chose Amazon as My Next Deep Dive
Amazon Deep Dive Part I
Recently, we said the following in one of our notes:
(Just ignore the shameless plug at the bottom and focus on the first part.)
If you’ve read our post “Black Swan in The White House,” you know we believe the recent tariffs drama could very well be a potential Black Swan event. And if history is any guide—think COVID, think 2008—these types of events almost always lead to some of the most attractive buying opportunities for high-quality companies. Market corrections, especially those triggered by fear and uncertainty, tend to drag down everything, good and bad alike. And that’s where you can often find mispriced gems—if you’re willing to look beyond the panic.
And yes, we’re trying to position ourselves accordingly. We’re not saying it’s easy, but we are saying it’s worth the effort.
Cas already took his swing at this last Friday. In typical Cas fashion, he went deep into the numbers—running a stock screener on the S&P 500 to identify companies that are operationally killing it but still undervalued by the market. He’ll be diving deeper into the most compelling names over the coming weeks—expect some surprisingly boring companies with not-so-boring upside potential.
I, on the other hand, am taking a very different approach.
See, I’m not the guy who loves frameworks and needs formulas to sleep at night. I prefer jumping straight into the deep end just to see if I can swim—or sink. So yeah, I’m ditching all the traditional stock-picking methods and going with something far more dangerous: gut instinct. Risky? Maybe. But also honest—and sometimes surprisingly effective.
And my gut is telling me one thing loud and clear: Amazon.
Today, I’ll walk you through how I landed on that conclusion—and why I believe Amazon is one of the best companies in the world to own right now. There’s more to this story than just AWS or Prime.
Here’s what you can expect in this article: we’re breaking down exactly why Amazon, in my view, is still one of the strongest companies on the planet.
So without further ado, let’s get into it.
Amazon hasn’t been "just a bookstore" for a very long time. It’s now a multi-sector machine that rides several of the world’s most important megatrends—all at once. So let’s unpack some of those trends, and how Amazon is positioned to win in each of them.
Surfing On Trends
Big Data
Big data is one of the key pillars of the digital age. Data is the new gold—because knowing your customer, their preferences, and consumption patterns gives you an enormous competitive edge. And it doesn’t stop there. Data around logistics, operations, even employee productivity can be used to fine-tune performance across the board.
But there’s a catch: you have to actually use that data. And preferably in ways that create value—not just for the business, but for the end user too.
This is where Amazon shines. Let’s break down the different ways they’re leveraging big data:
🔹 Personalized Recommendations
Every product you see, every “you might also like,” is data-driven. This doesn’t just boost conversion rates—it improves customer satisfaction and keeps people coming back.
🔹 Inventory & Fulfillment Data
Amazon uses real-time data to optimize warehouse management and delivery routes. The result? Lower operating costs, faster shipping, and a smoother customer experience.
🔹 Advertising Targeting
Amazon’s growing ad business is fueled by precise targeting, made possible by first-party data that Google and Meta would kill for. It’s a high-margin revenue stream that gives Amazon a huge leg up.
🔹 AWS as a Data Platform
Amazon isn’t just using big data—it’s selling the infrastructure for it. AWS gives third-party businesses the ability to store, analyze, and monetize their own data. That’s a whole second-layer revenue engine built on the same trend.
And let’s not forget: big data isn’t just about customers. It also fuels internal operations—and Amazon is one of the best in the world at using data to streamline itself from the inside out.
Take for example predictive maintenance. By analyzing sensor data from machinery and robotics systems, Amazon can preemptively service equipment before it fails—minimizing downtime and keeping the entire fulfillment engine running smoothly.
Amazon has the scale, the tech, and the culture to turn raw data into real operational muscle.
E-commerce
The business unit Amazon is best known for is, of course, its online marketplace. Over time, Amazon has expanded its assortment from just books to... well, pretty much everything a modern household might need. And let’s be real—the COVID crisis turbocharged the e-commerce boom. Our expectations as consumers have shifted for good: we now want convenience, competitive prices, and instant availability. The idea of going back to shopping like we did ten years ago? Highly unlikely.
And for good reason. E-commerce offers major advantages:
Low barriers for entrepreneurs: Platforms like Amazon, Etsy, and Shopify make it incredibly easy for small sellers to launch without needing a physical storefront.
Data-driven sales: Online stores collect ultra-detailed data on customer behavior, preferences, conversion rates, and emerging trends.
Efficiency and scalability: With relatively low overhead, e-commerce operations are easier to scale thanks to tech and automation.
Amazon doesn’t just participate in this space—it dominates it. The way they execute on e-commerce is, frankly, phenomenal. Amazon’s retail arm is engineered around the core customer demands: choice, price, and convenience. Customers come to Amazon for the selection—books, electronics, groceries, you name it—often at prices that are hard to beat. That’s partly due to their own economies of scale, and partly thanks to third-party sellers creating natural price competition on the platform.
But convenience is the real killer feature. With one account, customers can buy virtually anything and have it delivered within a day or two. And for third-party sellers, Amazon is the highway to scale. Instead of building a full-fledged e-commerce operation from scratch, they can plug into Amazon’s ecosystem—leveraging its logistics, payment processing, and customer base.
It creates a powerful flywheel effect: more sellers mean more choice, which attracts more buyers, which then brings in even more sellers. More choice, better prices, and unstoppable momentum.
Amazon’s overarching vision is to improve the lives of its customers. In retail, that translates to buying things as easily, quickly, and cheaply as possible. But of course, Amazon doesn’t stop there. Beyond retail, they’ve layered in an entire suite of services that operate on a single core model: subscriptions.
Subscription Services
Amazon isn’t just about delivering everything under the sun to your front door anymore. It’s also become a services company. And when you’ve got a customer base that large—plus all the data in the world about how they behave—you’d be crazy not to leverage it. Which is exactly what Amazon’s doing, by going all-in on subscription-based offerings.
Subscription services work because they combine two things customers love: bundled value and frictionless convenience. Take Prime, for example. The core need it fulfills? Saving money and simplifying the online shopping experience. For a flat fee, users get unlimited free delivery. That alone removes a major mental hurdle—no more stressing over shipping costs or minimum order amounts. And guess what? It nudges people to buy more often. The more they order, the more value they get from Prime.
But Amazon didn’t stop at logistics. Prime also bundles entertainment (movies, series, music) and cloud storage (hello, Prime Photos) into a single membership. That’s one central subscription instead of juggling Netflix, Spotify, and Dropbox separately. Convenience on steroids.
Other subscription offerings are laser-focused on content consumption. Think video, music, books—all on-demand, no per-item pricing. Kindle Unlimited and Audible are great examples: for a fixed monthly fee, readers and audiobook fans get access to huge libraries without needing to pay per title. Predictable cost, unlimited access.
And Amazon keeps innovating. Case in point: in January 2023, they launched a subscription plan for prescription meds. For just $5/month (in the US), customers can get access to a selection of common generics for chronic conditions—no matter how many medications they need. That’s right, they turned medication into a subscription too.
And that’s not even all they’re doing in healthcare. Amazon Clinic offers virtual care services, while Amazon Pharmacy delivers prescription meds straight to your door. It’s not just about convenience anymore—it’s about reshaping industries.
The big picture? Amazon’s subscription models meet modern consumer desires head-on: unlimited access, instant availability, and pricing certainty. Customers know exactly what they’re paying each month and what they’re getting in return—and Amazon keeps sweetening the deal with added perks. It’s time and money saved for people deep in the Amazon ecosystem. And it keeps them there.
That’s not just retention. That’s customer lock-in done right.
We’ve already walked through the most obvious megatrends Amazon is riding—but let’s be honest, that’s just the tip of the iceberg. The deeper you go, the more you realize how many different fronts Amazon is operating on. So before we wrap this up, let’s zoom in on a few lesser-known segments that are quietly driving serious impact.
Others
Advertising
Those sponsored product listings you see while browsing? Just one piece of a massive machine. Amazon’s ad business now spans everything from display ads on its own platform to full-scale video advertising on Twitch and Freevee. They even run a demand-side platform (DSP), letting brands target users outside of Amazon using its rich behavioral data. With an estimated $42 billion in revenue for 2024, Amazon now commands nearly 14% of the U.S. digital ad market—right up there with Google and Meta.
Logistics & Distribution
Beyond retail, Amazon has built one of the most advanced logistics operations on the planet. From warehouses and sortation centers to planes and vans, it’s a vertically integrated empire. Tools like Fulfillment by Amazon (FBA) and Supply Chain by Amazon make it easy for sellers to plug in and outsource everything—storage, packaging, and shipping—while Amazon handles the backend.
Devices & Alexa
Amazon’s hardware isn’t just cool tech—it’s the gateway to deeper engagement. Think Kindles, Fire TVs, Echo speakers, Ring cameras. Every product is designed to loop users further into the Amazon ecosystem, whether it’s reading, streaming, or voice shopping.
B2B Services
Amazon Business is quietly becoming a powerhouse, serving companies instead of consumers. From bulk office supplies to customized billing and logistics tools, it’s tailored for scale. In parallel, AWS and Amazon’s seller services provide even more value for business users. In 2024, Amazon Business is projected to generate over $43 billion in the U.S. alone.
Payment & Fintech
Amazon’s influence in fintech is growing fast. From Amazon Pay and co-branded credit cards to “Buy with Prime” for third-party sites and installment payment options—it’s all about making transactions faster and more trusted, both on and off the platform.
None of these verticals exists in isolation. They feed into and reinforce each other—creating a network effect that’s hard to replicate. Amazon isn’t just everywhere; it’s building the infrastructure of modern life. And that’s exactly what makes it so powerful.
Closing Remarks
As always, I like to start broad. Before zooming in on financials or metrics, I want to understand what needs a company fulfills—and how that’s evolved over time. That top-down view tells you whether a company’s growth is intentional or accidental. And with Amazon, let me tell you: the patterns are loud and clear.
Let’s start with customer loyalty. Amazon doesn’t just play that game—they invented a whole new version of it. Prime began as a logistics perk, but it’s evolved into a full-blown ecosystem: e-commerce, entertainment, cloud storage, and now even prescription meds—all bundled into one subscription. This isn’t your average rewards card. It’s structural stickiness. Leaving becomes hard. Staying becomes a no-brainer.
And the way they grow? Even more fascinating. Amazon has a talent for taking core strengths and redeploying them into completely new markets. Their logistics backbone—originally built to support e-commerce—turned into Fulfillment by Amazon (FBA), opening up their infrastructure to third-party sellers. AWS? Initially an internal tool, now one of the most profitable tech businesses on the planet. Alexa? What started as a smart speaker has evolved into a platform for their smart home strategy.
Innovation is the throughline. Amazon’s famed “Day One” culture isn’t just a motto—it’s operational doctrine. They treat every day like a startup’s first: bold experiments, fast iteration, and relentless execution. From AI-powered recommendations and warehouse robotics to virtual healthcare, they don’t just respond to trends—they run ahead of them.
And that’s exactly why I wanted to study Amazon in the first place. This isn’t a company that wins by accident. It’s a system. A machine. One that fuels its own momentum with every new move.
Next week, we’ll be following up on this deep dive. So far, we’ve explored what makes Amazon such a dominant, complex machine—but we’re not done yet. There’s still more to come
Stay tuned—you won’t want to miss it.
📢 Agree? Disagree? Think I missed something big? Drop your thoughts in the comments—I’m always up for a good debate.
🔔 Want next week’s conclusion delivered straight to your inbox? Hit that subscribe button so you don’t miss the final piece of this deep dive.
