Dear Investor,

We look forward to Amazon's shareholder letters each year (initially Jeff Bezos and now Andy Jassy's). This one did not disappoint. Two numbers tell you most of what you need to know about why we own Amazon.

The retail business is approaching $600 billion in annual revenue. That sounds like a lot, and it is. But roughly 80% of global retail sales still happen in physical stores.

AWS is running at $142 billion in revenue. Also a big number. But 85% of global IT spend remains on-premises. As Jassy puts it plainly: "That will change."

When you find a business with this kind of scale that is still early in penetrating its end markets, you pay attention. When that same business is also at the centre of the most significant technology shift in a generation, you pay very close attention.

Three years after AWS launched commercially, it had a $58 million revenue run rate. Three years into the current AI wave, AWS's AI revenue is running at over $15 billion. That is 260 times larger at the same point in the cycle. Those are not the kind of numbers you see very often in a lifetime of investing.

The temptation with a business like Amazon is to look at the size and assume the best days are behind it. The data suggests the opposite. The runways remain very long, the competitive position is formidable, and management is deploying capital with conviction into areas where the demand is plainly visible. That is the kind of setup we want to own.

The full letter is linked here and is worth a read. We are happy to discuss at your convenience.