Edgewood Management LLC - Large Cap Growth Composite on Amazon.com
Thesis
Edgewood sees AWS as Amazon's primary growth and profit engine, with AI workloads supporting a reacceleration toward high-20s percentage growth and margins above 35%. Custom silicon such as Trainium and Graviton, combined with Bedrock managed services, is expected to strengthen AWS as a core infrastructure layer for enterprise AI. Edgewood also expects retail profitability to improve through robotics, fulfillment regionalization, and the increasing contribution of high-margin advertising. The AWS backlog had reached 364 billion dollars as of the first quarter of 2026, with major AI customers providing additional catalysts. Edgewood believes custom chips can offer meaningful price-performance advantages and support both AWS margins and pricing power. At a mid-20s earnings multiple, the manager considers Amazon attractively valued relative to its expected earnings and embedded optionality in robotics, autonomous transport, satellite broadband, and logistics.
“Above-consensus earnings at a fair price: we think a mid-20s P/E multiple represents an attractive entry point”