Question: does Amazon's retail business matter for analysts at all? It drives the majority of revenue for the company but a much, much smaller amount of profit. Does Wall Street care about Amazon's core business one iota?
IMO AWS should be spun out as a separate company.
I’m sure Amazon.com would be fine, but it would take a chunk out of their margins. I’m also sure that their X% ownership of the spun out AWS would cover the difference.
From the point of view of running an enterprise that lasts, though, diversification is important. Financially diversification is probably, in general, bad for EPS. But if you want to run a lasting empire, it's best to not tie it to just a narrow thing.
multiplying huge revenue by a small percentage to get a big positive number
to multiplying huge revenue by a small negative percentage to get a big negative number
So that's how Kroger managed to lose billions over the last couple of quarters, or how small changes in shoplifting/shrinkage based on store makeup can cause losses to some chains, etc.
They didn't lose money because of their grocery operations. Those margins have increased slightly.
Their margins have increased slightly if you ignore the part where their efforts at grocery fulfillment blew up.
Just because an industry is essential doesn't mean that every firm in it makes money.