TIP745: BEST QUALITY STOCK IDEA Q3 2025

W/ CLAY FINCK

TIP745: BEST QUALITY STOCK IDEA Q3 2025 W/ CLAY FINCK

14 August 2025

On today’s episode, Clay Finck breaks down his best quality stock idea for Q3 2025: Amazon.

Clay explores how Amazon has evolved from a low-margin online retailer into a diversified, high-margin tech platform. He also makes the case as to why Big Tech may be systemically undervalued, providing a unique opportunity for investors willing to ride out the higher levels of stock price volatility.

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IN THIS EPISODE, YOU’LL LEARN:

  • Why Big Tech, despite its size, may be systemically undervalued.
  • How Amazon evolved from a low-margin online retailer into a high-margin tech platform.
  • The three megatrends Amazon is positioned to benefit from.
  • A breakdown of Amazon’s four main business segments: Retail, AWS, Advertising, and Prime.
  • Amazon’s key competitive advantages and culture of reinvention.
  • How we view Amazon’s valuation today.
  • And so much more!

 

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

 

[00:00:00] Clay Finck: Each quarter, in our best quality idea series, we break down a quality stock. Its business model, competitive advantages, valuation, and more. For this quarter, I’ll be breaking down Amazon. Amazon needs no introduction to our audience. For years, we’ve seen the biggest companies continue to deliver the vast majority of the earnings growth in the S&P 500.

[00:00:20] Clay Finck: And that seems to only continue for companies like Amazon, Microsoft, Meta, Alphabet, and a few others. In this episode, I’ll discuss why big tech, despite its size, may be systemically undervalued, how Amazon’s business model has evolved from a low margin retailer to a high margin tech platform. The three mega trends that Amazon is writing, a breakdown of their valuation by business segment, how Amazon’s culture of reinvention and long-term thinking positions it to keep compounding even as it nears a $3 trillion valuation and much more.

[00:00:54] Clay Finck: So with that, let’s dive right in.

[00:01:00] Intro: Since 2014, and through more than 180 million downloads, we’ve studied the financial markets and read the books that influenced self-made billionaires the most. We keep you informed and prepared for the unexpected. Now for your host, Clay Finck.

[00:01:24] Clay Finck: As I was thinking through what company I wanted to cover during this episode, I was taking a look at my watch list, and I keep coming back to this idea of how the internet has enabled some of the greatest companies the world has ever seen, especially from a network effect standpoint. I discussed this in the past during our episode on Booking Holdings, and we also covered the seven types of competitive advantages a company can have back on episode 727.

[00:01:51] Clay Finck: And network effects have proven to create some of the most scalable business models and one of the most difficult modes for competitors to disrupt. This brings me today to discuss Amazon. Now, I already know what many of you are thinking. You’re thinking that Amazon is already a $2 trillion company. How much more could it possibly grow?

 

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