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Jeff Bezos of Amazon. Photo: Ted S. Warren

Walmart is worth half as much as Amazon but has paid 46 times more income tax since 2008 — $64 billion versus Amazon's $1.4 billion, writes Scott Galloway, an NYU marketing professor.

"The most uncomfortable question in business, in my view, is how do we pay our soldiers, firefighters, and teachers if a firm can ascend to $460 billion in value (#5 in the world) without paying any meaningful corporate taxes," writes Galloway, author of the forthcoming The Four, an examination of Big Tech.

Why Amazon pays so little: Amazon is worth a lot to investors, but since its founding has plowed almost all its profit back into the business: Since 2008, Walmart has earned $229 billion before tax and paid dividends; Amazon has reported just $14 billion in profit, with no annual cash payout to shareholders.

Investors are patient: Amazon shareholders have met this strategy with patience, which can be seen in the ratio of its stock price to profits over the past twelve months. The most valuable company in the world, Apple, is worth roughly 18 times more than it earned in profits over the past year, while the second most, Google, is worth 33 times. For Amazon, that figure is a whopping 247.

  • Apple, Google, and Amazon have similar public profiles — they are ultra-powerful tech companies that have grown to dominate their respective markets over the past two decades.
  • But Wall Street sees them as completely different beasts. The relatively low ratios of price to profits for Google and Apple indicate that investors see them as mature and predictable.
  • Amazon, on the other hand, is still viewed as a growth company whose ultimate potential is still unknown.

Why it matters: For Amazon to justify its price-to-earnings ratio, it will eventually have to report much higher profits, and there is no indication that it will do this by raising prices and cutting back investment in itself.

Go deeper

8 mins ago - Technology

Facebook seeks fountain of youth

Data: Piper Sandler Taking Stock With Teens Study; Chart: Axios Visuals

Facebook CEO Mark Zuckerberg on Monday said that the company is pivoting its strategy to focus on young adults, following reports that teens have fled its apps.

Why it matters: A series of stories based on leaked whistleblower documents suggest the company sees the aging of its user base as an existential threat to its business.

Too big to cover alone: Newsrooms team up

Illustration: Annelise Capossela/Axios

News outlets are increasingly willing to work together on big, multifaceted stories — including this week's reporting on leaked documents from a Facebook whistleblower.

Why it matters: Collaborative efforts help bring more resources to bear on complex stories, some of which require a global reporting effort. But they require high degrees of coordination, and competition can sometimes get in the way.

Axios-Ipsos poll: Confidence in Biden COVID recovery tumbles

Expand chart
Data: Axios/Ipsos poll; Chart: Kavya Beheraj/Axios

Confidence in President Biden's ability to rescue the economy from COVID-19 has dropped since January, even as Americans' faith rises in his ability to make the vaccine widely accessible, according to the latest installment of the Axios/Ipsos Coronavirus Index.

Why it matters: It's Democrats and independents driving the declining economic confidence, from 52% of all U.S. adults at the start of his presidency to 44% now. Their softening faith could hinder Biden's ability to lead and hurt Democrats' position heading into the 2022 midterms.