Amazon dominates the U.S. e-commerce market with over 37% share and leads in cloud computing with Amazon Web Services. It’s part of the Magnificent Seven tech stocks, influencing 34% of the S&P 500. Despite high expenses in e-commerce, AWS contributes significantly to profits, with a 34.6% profit margin.

Amazon’s revenue in Q3 was $180.17 billion, with $147.16 billion from retail sales. The e-commerce business, while profitable, faces challenges due to high costs. Trade tensions also impact costs, prompting Amazon to consider various strategies to mitigate expenses and maintain profitability.

AWS is Amazon’s standout division, contributing $33 billion in revenue and $11.43 billion in operating income in Q3. The division’s 34.6% profit margin significantly boosts Amazon’s overall net income. AWS also launched an upgraded AI chip, Trainium3, to enhance its cloud platform capabilities.

Despite challenges in e-commerce expenses, Amazon is making efforts to expand AWS and monetize AI. The stock has a P/E ratio of 32, lower than earlier in 2025. With AWS showing strong growth potential, Amazon remains a top stock pick and ranks as the sixth in the Magnificent Seven list.

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Read more at Yahoo Finance: Ranking the Best “Magnificent Seven” Stocks to Buy for 2026. Here’s My No. 6