Shares of Meta, Facebook's parent company, may have cratered the past several weeks, but Amazon is in fine shape, with its share prices gaining value following its quarterly earnings.
Amazon recorded record revenue of $137 billion, although its operating income compared with the same period last year fell to $3.5 billion.
Joe Lonsdale, general partner at the venture capital firm 8VC, dug beneath the surface of those numbers in a piece for the Wall Street Journal and showed how reliant Amazon is on Amazon Web Services (AWS) for its profitability.
"The report's most notable trend is the large and growing gap between the company's cloud-computing division, Amazon Web Services, and everything else it does," Lonsdale wrote.
Because of that gap, there are anti-trust implications.
The unit reported $5.3 billion in operating income on $18 billion in revenue. That means non-AWS business lost money during the quarter.
Amazon has a long history of deferring short-term profitability in pursuit of long-term market share. But undercutting competitors' pricing and selling at a loss, coupled with Amazon's 40% market share of U.S. e-commerce, presents a potential violation of anti-trust law.
Lonsdale makes this point: Amazon is a store that sells practically anything you need and is able to price products below market price because of the success of AWS, giving it leverage a standalone business does not have.