Amazon's own FY2025 operating margin, held flat - the FLOOR of the documented max(own current margin, sector peer median) rule. Explicitly NOT the scan's hardcoded 20.04% constant, which the memo inverts out of the scan record and rejects: 'the scan's PASS was, in substance, the statement Amazon is cheap if its operating margin nearly doubles to 20%'. Constraint m_EBIT,T 11.2 <= m_gross,T 50.3 SATISFIED. Equal to (not below) the trailing operating margin, so the below-trailing error class does not apply. The memo's own model Base case terminal margin is 9.1%, BELOW today's level - which is why PASS WITH ARGUMENT was not available.
Risk & exit
Four distinct questions, one field each. A price is not a thesis: the trigger below forces a re-underwrite and freezes further purchases — it is never an automatic sell.
Risk trigger 12% below the memo price
$203.05
Forward E[R] vs a 0% floor
+26.1%
A daily close below $203.05 triggers a mandatory re-underwrite and freezes further purchases. It is not an automatic sell unless a separate fundamental invalidation condition has been breached.
Thesis-invalidation conditions
Fundamental and falsifiable, never price-based. If one is satisfied the thesis is marked dead and the position is retained only by explicit decision.
Price ≤ $150 (the bear-scenario zone, ~35% below spot) with AWS growth still ≥ 20% — at which point the reverse-DCF requirement falls to ~17% terminal operating margin, within reach of a mix-shifted Amazon.
Economic free cash flow turning positive while capex stays above $200bn — proof the spend is earning.
E1 — AWS revenue growth printing below 20% year on year in any quarter while FY-forward capex guidance stays above $200bn.
E2 — 30-day FY2027 EPS revisions turning net negative (currently +2.8% over 90 days). FY2027
E3 — Any Anthropic down-round or a reversal of the accumulated ~$32bn of marks, which would cut reported EPS by several dollars with no change in the operating business.
T1 (tape) — weekly close below the 200-day moving average (~$234.6) with a lower-high / lower-low sequence. Required, because Gate 6 is currently neutral and initiating a short into a neutral tape with no variant is the exact NET error.
Impairment case
Not stated. No permanent-loss case with a named cause is on file. A valuation bear case is not an impairment case.