Will Tariffs Crush Amazon? Here's 1 Metric That Says It Will Be Just Fine
One of the primary companies that investors are worried about getting severely hurt by tariffs is Amazon (NASDAQ: AMZN). Amazon is the world's largest online retailer, and a large chunk of its goods come from China, which currently has a sky-high tariff rate. If this cost is passed onto the consumer, these goods may not be purchased anymore, which would hurt Amazon's retail sales.However, I don't think that's the correct metric to use when assessing Amazon's prospects, as the sale of goods doesn't make Amazon a ton of money. Instead, I'd challenge investors to examine where the profits come from. After doing that, it's clear that Amazon will be just fine, even if the brewing trade war drags on.Over the past 12 months, Amazon's three divisions have produced the following revenue and operating profits:Continue reading
One of the primary companies that investors are worried about getting severely hurt by tariffs is Amazon (NASDAQ: AMZN). Amazon is the world's largest online retailer, and a large chunk of its goods come from China, which currently has a sky-high tariff rate. If this cost is passed onto the consumer, these goods may not be purchased anymore, which would hurt Amazon's retail sales.
However, I don't think that's the correct metric to use when assessing Amazon's prospects, as the sale of goods doesn't make Amazon a ton of money. Instead, I'd challenge investors to examine where the profits come from. After doing that, it's clear that Amazon will be just fine, even if the brewing trade war drags on.
Over the past 12 months, Amazon's three divisions have produced the following revenue and operating profits:
