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If you read just part of the analysts' reports on Amazon (AMZN), you'd never know that its net profit had gone all the way down to a loss. Indeed, you'd probably be mistaken, thinking that its earnings and margins were on the way to the moon instead.

This happens because instead of focusing on the net profit, analysts are focusing on Amazon's gross margins. And they're ignoring quite a few obvious things. This article will show why the focus on gross margins is misguided, possibly intentionally so.

The story

Usually Amazon's investment story goes like this: as Amazon grows and 3P/AWS sales gain prominence in its overall sales, the much higher gross margins of 3P/AWS will eventually...

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