Barclays discusses impact of Kuiper losses on Amazon margins

Barclays says one of the biggest debates among investors is how much higher Amazon can take retail margins. The firm says 2025 “will be a bit tricky” for the company as Kuiper losses should peak at $3.3B, or an 80 basis point drag on margins. However, Barclays’ math shows that Amazon’s core operating income margin is still 450 basis points below 2018 levels, suggesting more upside in 2026 and beyond. Kuiper operates in a “major” $61B total addressable market opportunity for Amazon across consumer and enterprise broadband, direct-to-device, aviation and other markets, the analyst tells investors in a research note. The firm says the operating income impact to Amazon is highly contingent on the timing of Kuiper launches. Launching the rockets that will carry Kuiper satellites will be expensive, it adds. Kuiper needs 578 satellites up before it can introduce its service, per its Federal Communications Commission license, which Barclays expects Amazon to reach around mid-2026. The firm keeps an Overweight rating on Amazon with a $235 price target