Warren Buffett dumps $1.7B of Amazon stock(finbold.com) |
Warren Buffett dumps $1.7B of Amazon stock(finbold.com) |
The problem is, megacorp with infinite capital get to make these massive mistakes and stumble through failure after failure, when everyday entrepreneurs get crushed for the tiniest problem.
My experience over the last year has been the opposite. More and more of the specialized bits and pieces I need or want are only sold online via Amazon.
Extremely depressing.
It's amazing how many times you buy direct from a vendor and then it comes via Fulfilled by Amazon.
The other issue is when anything goes wrong I've had a hell of a time with some vendors. It's a crapshoot - some vendors ship quickly and competently, and handle customer service like returns quite well. Others you might end up with your product not even shipping for a week much less arriving, even though the store says "in stock ships tomorrow". Due to this, when I really must have something on time or if it's a risky purchase I have a good chance of needing to return I tend towards just getting it with Amazon.
A lot of smaller shops simply don't want to deal with logistics and customer service - it's hard to compete on Amazon for shipping costs. And warehouse/returns/etc. is just a nightmare for a small shop. I absolutely understand why a small speciality manufacturer with a few dozen low volume SKUs would prefer to just use FBA and be done with it.
Obviously, there are long term trends like the acceptance of credit cards that took place between the late 1970s and late 1980s in the US. But retail isn't exactly known for being a hotbed of innovation.
If you are thinking about other aspects of Amazon (obviously, AWS), then ... I can't comment on that.
This was Berkshire Hathaway, not Warren Buffet, despite the misleading title.
Not so much that it is hard, as that Amazon more or less forces vendors on its platforms to eat shipping costs.
Amazon has been really good for us when we wear our consumer hats. Not so much when we wear the others.
<meta name="GENERATOR" content="MSHTML 8.00.6001.18828">
Copyright © 1978-2025 Berkshire Hathaway Inc.This brings back some (unpleasant) memories.
But otherwise I admire the minimalism.
Good reminder that every web page starts off fast by default and is only made slow by designers and frameworks.
I almost want to let Warren know he could have an entire extra egg McMuffin per year if he switches to SVG rendering of the Geico logo on the site.
Guys, quit being so desperate. Concentrate on quality items at competitive pricing and fast delivery. Don’t turn into TJ Maxx.
My Echo, that I use solely to voice activating lights and switches, is now an ad machine and one bad day away from going in the trash. Next time you do a wave of layoffs, please include everyone involved in these horrible decisions.
The seller platforms in particular (Brand Registry, Vendor Central, Seller Central, Transparency, etc.) have crippling levels of technical debt. The situation has only gotten worse with Jassy's reckless directive for the entire organization to push into Generative AI (https://www.aboutamazon.com/news/company-news/amazon-ceo-and...). So much basic stuff is just breaking down, and seller support is overwhelmed or unable to intervene to fix the mess.
You can see a small sample here involving problems with product attributes (https://sellercentral.amazon.com/seller-forums/discussions?s...). Google "Amazon AWD delays" or "Amazon CSBA problems" or "Amazon remote fulfillment problems" to see examples of programs that are unable to provide even basic levels of the services promised to sellers.
Meanwhile, Amazon has been so greedy with fees since Jassy took over that sellers of all sizes and many small to midsized brands are being squeezed out of existence or driven off Amazon. Its PPC ad platform is completely predatory, loaded with dark patterns and hidden defaults that add billions to top-line revenue while strip-mining the accounts of sellers who often have no choice but to participate in the auctions.
It's clear that Amazon is running scared when it comes to dealing with new competition, including the Chinese shopping sites and the looming prospect of agentic AI and other new AI-powered shopping tools eating its lunch. For the first time ever last month, I saw an Amazon search results (via Rufus) that actually directed shoppers to third-party brand sites. This would have been heresy 5 years ago.
Large stock sales always make headlines but they don't automatically signal bearishness or really anything else. After all what's the point of investing if you never realize gains?
In any case, I would not take what Berkshire does with much weight.
As Buffett himself said, if you took out their 5/6 best performing investments out of their equation they would be matching the sp500, and if you took out 20, they would be trailing it.
They know that their over performance came from a small number of incredibly well performing bets.
AWS has been their real money maker, but also the explosion of AI and server farms has worked against them in threes ways: there is much more competition on infrastructure, the costs to run infrastructure keep going up, if you're looking for a growth industry there are other more appealing stocks now to park your capital.
https://www.quiverquant.com/institutions/BERKSHIRE%20HATHAWA...
Berkshire also sold around $2.8B of Apple stock, although that was a much smaller move as a percentage of their position.
We have ads now for discounts at Taco Bell. Not even Pizza Hut. Taco Bell!
The US economy for regular people is not good.
I guess they don't see value in Amazon shares any more. AI spend will probably hit their aws profits.
Note that the listing of shares they own doesn't include the companies that are subsidiaries. Like Geico and other insurance companies, BNSF Railway, Berkshire Hathaway Energy, etc.
Amazon spent last year 100B in Capex. They announced they will spend 200B this year. These numbers are INSANE. Greater than GDPs of entire countries.
They literally don't have the cash to do it. Either they need to grow their cash flow significantly, or deplete their cash reserves or take a huge loan (likely a combination of them).
Jassy is playing Russian roulette with the company and his career.
I don’t understand this? Amazon is a profitable company, on the scale of tens of billions of dollars per quarter. They very literally do have the cash.
Am I missing some subtlety in their financial reporting?
Plus continuing waves of layoffs will lead to more frequent and longer AWS outages, and lower quality of retail products will hurt that side of Amazon.
and returned.
They need competition.
Also, why would anyone want to work at Amazon at this point?
One of the worst companies to join with the worst margins out of the big tech companies.
Every friend I've ever had work for them was burnt out but stayed because they were too burnt out to look for a new job
I've been wondering if it is even possible for a publicly-traded company to deliver a voice assistant product without these incentives involved. I have to imagine the UX of these devices would be much different if they were built by a private company without the same market pressures. It would need to be self-contained and local, so that the infrastructure burden (e.g., data and AI in the cloud) wouldn't create a need for subscription service or data collection revenue to cover the cost.
For those considering smart home devices, please just buy a home assistant device. It is easy for the non-technical and also not that much more expensive
Apple's HomePods have never had ads and don't require a subscription/data collection to control home devices.
1. I get very useful items at very good prices, many of which I would have to wander the city for hours to find, or couldnt find at all: - Eg: I got a pair of adjustable dumbbells at <2K INR. Some of you would call it a cheap knock. But it has been super useful and I would have not bought it if it cost 8k INR. I brought a whole bosch repair toolkit at good price and it has been invaluable for fixing electric/plumbing etc.. issues. I got a high volume travel bag - I didn't even know 40L travel bags existed and wouldnt have brought one if not for amazon. I could go on.
2. Amazon Fresh is usually cheaper for groceries and maintain consistent quality compared to local supermarkets. I will also avoid the need to walk long with the grocery bag.
3. Electronics are significantly cheaper on amazon and again the need to search.
Maybe all of this can be even better as you said. But bottom line is that their operations look pretty efficient to me. Their catalogue is pretty much unmatched. (They may be losing money on retail business - but that's not my position to care as a customer. As other commenter pointed out, it may not even matter much for stock price.)
elsewhere it's awful, for the exact same features you describe.
they even bought a premium supermarket chain so their produce stop being returned in the US.
https://github.blog/open-source/maintainers/the-local-first-...
I've gotten 2 different "You didn't return the right item" because I presume some underpaid, overworked contractor at the Amazon return site lost it or stole it.
Fortunately, the second one is very well documented, so Amazon is going to lose badly if they don't figure out what is going on.
Amazon is pretty good at optimizing buying things but outside of that everything else sucks really bad especially on mobile
Example last purchase: An optical SPDIF/TOSLINK to 3.5 mm DAC box (5V/USB-powered) to put behind the TV with a broken/very low quality audio output. It was about $15 including 25% VAT. Probably like $5 on Aliexpress, but I didn't want to wait 6-8 weeks.
Never really buy anything for more than $50 from them though. And never anything containing Li-Ion batteries.
In 2025 it was 27 orders
I expect it to be even lower this year. I didn't even buy my eero router upgrade from Amazon.
I largely attribute this to poor quality products, horrible search interface, trying to sort through the dropship spam, and prices no longer being as competitive.
Amazon used to have decent-quality "amazon native" brands like Anker, Eufy, Eero etc. but there are better alternatives to buying all of these products now
Warren Buffett is known to trade on product quality (he buys what he uses). So his sale could be based on that.
They are the TJ Maxx of software development.
I personally haven’t expected anything more of them for years. Once you’ve seen how the sausage is made and all that.
How is it that you’re getting ads?
Region might matter. I set it to Australia/New Zealand region and for about a year it didn't show ads. But it does, now, even though it talks with an Australian accent.
- An A-Z claim from the buyer was denied by Amazon for fraud (supposed non-delivery of the item), yet their returns department auto-approved a return for the same order just 12 days later.
- The customer returned a completely different item with documented serial number/weight discrepancies and seller-provided video evidence, yet I was left with no recourse.
- The customer then filed a fraudulent credit card chargeback. I won the first round, but Amazon refuses to participate in second-round disputes - so despite overwhelming evidence of five separate fraud attempts, they sent a generic email and docked $5k from my seller account.
- Amazon then refused to answer any further communications, including basic disclosure of which card issuer was involved or what evidence was submitted - making any independent appeal impossible.
- Every dispute stage (A-Z, returns, chargebacks) required rebuilding the fraud case from scratch. Zero continuity, and zero care for an independent seller with a strong track record of sales and feedback.
At least they mark ads as 'sponsored', even though it isn't super prominent.
I always scroll until I see organic results, myself.
Net profit margins for retail are only around 3% across the industry.
Amazon isn't actually doing anything unusual in that regard. Retail is just a very low profit margin business whether it's physical or online.
These numbers are always confusing to those of us in the tech world where SaaS net profit margins are always very high.
You have to believe that Amazon is poised for much higher growth than they are to justify their current stock price.
Despite controlling about 40% of US online retail, Amazon only has about an 8% share of total US retail. There’s still plenty of room to grow here.
https://www.emarketer.com/content/amazon-will-surpass-40-of-...
If there is something I might prefer to not wait on Amazon for, I will not find it at Walmart even if I remember Walmart once carrying that product. This is without fail. Each new (rare) trip to Walmart reinforces the lesson.
I have never been fond of Walmart's grocery department. I suspect (long ago) that they were able to sell produce 1 cent cheaper than anyone else by buying the least-wanted, unsold inventory from agricultural distributors, and the quality always reflected that theory. I could buy strawberries from Walmart, buy them again from the local grocery chain 10 minutes later, put them in the fridge simultaneously. And the Walmart-bought produce was slimy the next day, the grocery store produce not (unless I stacked the Walmart clamshell on the grocery store one... cross-contamination).
Worse still, they have reduced their personnel to skeleton crews, all shifts. The stores tend to look like they were looted after hurricanes. I do not know how anyone shops at Walmart, and it scares me that if my circumstances were less agreeable I might be forced to shop there too. Walmart might aim for stealing marketshare from Dollar General as a growth strategy, the overlap must be nearly absolute.
You misunderstand the point of retail. It's now a marketplace where they use their name recognition and (alleged) consumer friendliness to collect fees from sellers. It costs to list, it costs to do FBA, and it costs to run ads so that your products appear in search results. Amazon ads is incredibly profitable.
That's also why Prime has such a grab bag of benefits. By keeping Prime membership sticky, the overall value of that marketplace supports the fees charged to sellers.
This is different from AWS where your reach is essentially "all of the internet" for anything that you launch. But this really just meant that reinvesting the revenue from AWS was harder for them to do, compared to revenue from retail. As a result, they didn't. Not nearly as aggressively.
By combining these two businesses, Amazon can achieve a more balanced capital structure. Compared to other cloud service providers such as Oracle, Amazon can maintain a lower debt-to-equity ratio, reduce its debt burden, and sustain stronger overall financial health. At the same time, it can achieve higher overall profit margins compared to traditional retailers like Walmart.
You're right, but their retail business does support the bulk of their ad business which is extremely profitable. Arguably it might actually make sense for them to run their retail business as a loss leader to support their high-margin ad business.
Before Claude Code, a full cloud migration could easily be a couple months. We migrated our whole stack to GCP in about a week. It's trivial to switch clouds now with K8 stack and Claude Code.
I think Amazon netted something like $70 billion last year. What's the problem with them just staying the course and earning tens of billions of dollars in profit year-after-year-after-year?
The purpose is to get shoppers to look at more stuff and impulse buy.
I honestly believe search is bad for the same reason.
Thanks for the heads up.
There's no real evidence that this trade was made by Buffet himself, and it's part of a general major sell-off of Amazon that transparently did not temporally align with the idea that Amazon's retail business has suffered a decline in quality.
This is the market making a (reasonable!) judgment that it lacks confidence that Amazon's capital expenditures will pay off.
When you present these numbers alongside each other, you imply that they will go from making ~$20b/quarter to losing ~$30b/quarter, which is not plausible to me.
Yes 100B in capex is unprecedented for Amazon (let alone 200). Last time they peaked Capex was at ~60B in 2021 when they decided to double their supply chain network.
So the marginal capex on gpus is likely 70-80% of their total capex
Because Amazon and Walmart are two different companies with very different product offerings.
Retail can only grow so far. AWS continues to grow at a relatively incredible rate compared to Walmart's business.
https://www.macrotrends.net/stocks/stock-comparison?s=revenu...
Even more so if you compare EBITDA:
https://www.macrotrends.net/stocks/stock-comparison?s=ebitda...
Amazon’s huge 3p seller network means it can offer advertising as a revenue stream in a way Walmart can’t compete with.
[0] https://www.macrotrends.net/stocks/charts/AMZN/amazon/free-c... [1] https://www.macrotrends.net/stocks/charts/WMT/walmart/free-c...
How many decades now have we lived in a world where the demand for investment far outstrips sane investment opportunities? In such a world, do stock prices have to be justified as you insinuate? And what happens when the prices are far higher than can be justified? I ask not rhetorically, but rather whether I should be hoarding shotgun shells and canned goods and hiding in the basement.
Why does Tesla have 15x the market cap of BYD, despite BYD selling more cars, having more revenue, and much faster revenue growth?
In the Netherlands you'll be waiting an hour for your meal to be delivered by a bored teenager on an ebike. And you're going to be grateful.