People Forget Amazon’s $600 Billion E-Commerce Business Is Bigger Than Microsoft

Amazon's annual e-commerce revenue is projected to exceed $750 billion this year, making it larger than both Exxon and Microsoft in total revenue. The company's Amazon Web Services (AWS) division is expected to generate $180 billion in revenue by 2026, with a projected 40% growth rate, representing an estimated $2 trillion of Amazon's $3 trillion market capitalization.

Investors may benefit from separating Amazon into two distinct public companies to capitalize on its stable e-commerce and high-growth AWS businesses. Despite being a leader in the Fortune 500 with its e-commerce division surpassing Walmart's, a significant portion of Amazon's revenue comes from international operations, with North American revenue accounting for about $35 billion this year.

AWS is set to lead with $180 billion in revenue by 2026, translating to an operating income of approximately $70 billion. While it's challenging to quantify the exact value Amazon's e-commerce division adds to the company's market cap, its rapid growth rate surpasses that of AWS, suggesting a valuation of around $1 trillion. Comparatively, AI-focused company Anthropic holds a market value of about $1.8 billion, which is significantly lower than AWS's projected $2 trillion valuation.

The potential breakup of Amazon into two separate public companies could allow investors to make more targeted investment decisions based on their preferences for e-commerce or AWS, depending on their views on the future of AI and retail.