Amazon (AMZN 1.99%) CEO Andy Jassy put a striking number on one of his company's least-discussed businesses this spring. If Amazon's in-house chip operation were a stand-alone company that sold the chips it produces to outside buyers, he said on the company's first-quarter earnings call in April, its annual revenue run rate would be about $50 billion.
The business as it actually runs today is no small thing either. Amazon's custom chip unit -- Graviton processors, Trainium artificial intelligence (AI) accelerators, and Nitro networking chips, all deployed inside Amazon Web Services (AWS) -- has an annual revenue run rate above $20 billion, growing at triple-digit percentage rates year over year.
And customers have lined up. Jassy said in the company's first-quarter earnings call that it now holds more than $225 billion in revenue commitments for Trainium.
Numbers like those suggest Amazon is building something bigger than an internal cost-saving project. Here's a closer look at the chip business, and what it could mean for the stock.
Image source: Amazon.com Inc.
A $20 billion business inside AWS Amazon's chips business grew nearly 40% quarter over quarter in the first quarter alone, Jassy said on the earnings call. And as best the company can tell, he added, its custom silicon operation is now "one of the top three data center chip businesses in the world."
The $225 billion commitment figure comes with recognizable names attached. Amazon's first-quarter report disclosed a commitment from OpenAI to consume approximately two gigawatts of Trainium capacity beginning in 2027, and an agreement under which Anthropic will secure up to five gigawatts of current and future generations of Trainium chips. Uber is using Graviton chips to match riders with drivers. And Meta Platforms signed on to deploy tens of millions of Graviton cores.
Demand is running ahead of supply, too.
"Our Trainium2 chip has about 30% better price-performance than comparable GPUs, and has largely sold out," Jassy said on the call. Trainium3, which started shipping at the beginning of 2026, is nearly fully subscribed. And much of Trainium4, still more than a year from broad availability, has already been reserved.
Today's Change
(
-1.99
%) $
-5.07
Current Price
$
249.89
A challenger to Nvidia, within limits Of course, Nvidia is still much bigger. Its graphics processing units (GPUs) dominate AI data centers, and Amazon itself remains a huge Nvidia customer -- the same first-quarter report that touted Trainium also announced plans to deploy more than 1 million Nvidia GPUs starting in 2026.
Trainium's selling point is cost per unit of computing, and Amazon offers its chips only through AWS.
Jassy's $50 billion figure is also a hypothetical. It describes what the business would look like if Amazon sold its chips on the open market the way other chipmakers do, which today it mostly doesn't. Amazon doesn't break out the unit's profits, either, so investors can't yet see what all this silicon earns.
But the chip momentum sits inside a cloud business that is accelerating. AWS revenue grew 20% for all of 2025, then 24% in the fourth quarter, then 28% in the first quarter of 2026, reaching $37.6 billion -- growth Jassy called the segment's fastest in 15 quarters. AWS also produced $14.2 billion of operating income in the first quarter, up 23% from $11.5 billion a year earlier.
That growth is expensive. Amazon expects about $200 billion in capital expenditures across the company in 2026, and its free cash flow for the trailing 12 months fell to $1.2 billion from $25.9 billion a year earlier as AI investments ramped up.
The spending is the main risk here. If demand for AI computing cools before these investments pay for themselves, Amazon's profits and its stock could suffer.
Still, the stock arguably isn't asking investors to pay much for the chip business. At about $255 per share as of this writing, Amazon trades at about 30 times earnings, though earnings get a boost from a $16.8 billion pre-tax gain on the company's Anthropic investment booked in the first quarter. Excluding it, the multiple would be somewhat higher. Even so, shares are up a modest 10% or so this year while AWS accelerates.
Ultimately, I don't think Trainium needs to beat Nvidia for Amazon shareholders to win. A chip business with a $20 billion run rate, triple-digit growth, and $225 billion in commitments strengthens the case for a stock priced like this while its biggest profit engine accelerates. I already liked Amazon at this price. The chip business is one more reason.
Amazon (AMZN 1.92%) brought in a jaw-dropping $182 billion in revenue in the first three months of 2026. While the majority of this sum came from its retail operations, the market undoubtedly spends more time focused on the company's cloud division, Amazon Web Services (AWS).
This isn't surprising. AWS posted a 28% year-over-year revenue gain in Q1, its fastest growth pace in more than three years. And AWS' operating income accounts for 59% of the overall company's total. These are impressive trends.
But investors should take a deeper look at the AWS growth story.
Image source: Amazon.
Double-click on the backlog metric Andy Jassy, who has been CEO of Amazon since taking over from founder Jeff Bezos in July 2021, highlighted the huge opportunity that the cloud segment is facing. As he wrote in his 2025 shareholder letter, "85% of global IT spend remains on-premises."
In recent years, the artificial intelligence (AI) market has taken a central position in the financial picture. "Our AI revenue is growing triple digits year over year," Chief Financial Officer Brian T. Olsavsky said on the Q1 earnings call. It's hard not to be bullish about the company after reading this.
The market places a lot of attention on a single metric for cloud computing leaders like Amazon: backlog, which indicates contracted (but not yet delivered) demand from customers. AWS had a $364 billion backlog as of March 31, up 49% from three months before.
And that figure didn't include the 10-year $100 billion deal with Anthropic signed in April. But it did include OpenAI's $138 billion spending commitment over the next eight years. These are the two most prominent AI labs out there, and both are weighing initial public offerings that would value the companies at more than $1 trillion.
The outlook for AWS is highly reliant on the ability of these two start-ups to fulfill their spending commitments. This puts its backlog on shakier ground.
As of May, Anthropic and OpenAI had a combined annualized revenue run rate of $72 billion. Their total yearly spending commitment to AWS of about $27 billion amounts to 38% of this sales figure. This isn't a cause for concern at first glance.
However, this doesn't count their spending obligations with other cloud providers, measured in the hundreds of billions of dollars. It also excludes operating expenses and the need to eventually produce a profit. There is tremendous uncertainty in the coming years, all dependent upon the ability of Anthropic and OpenAI to register skyrocketing revenues and build durable business models.
Amazon
Today's Change
(
-1.92
%) $
-4.90
Current Price
$
250.06
Say goodbye to free cash flow Amazon has said it will lay out $200 billion on capital expenditures this year, up 52% compared to 2025. The company will burn $11 billion in free cash flow in 2026, according to analysts' consensus estimates. Investors have to get used to this new financial reality.
On a positive note, Amazon has historically excelled at choosing where to invest with an eye toward the long term. Additionally, the sizable investments it's making could also benefit the overall business. The online marketplace, logistics network, Prime Video, and advertising segment, for example, are all leveraging its expanded AI capabilities.
Amazon (AMZN - Free Report) closed the most recent trading day at $249.89, moving -1.99% from the previous trading session. The stock trailed the S&P 500, which registered a daily loss of 0.51%. Meanwhile, the Dow experienced a drop of 0.2%, and the technology-dominated Nasdaq saw a decrease of 1.47%.
The online retailer's stock has climbed by 7.35% in the past month, exceeding the Retail-Wholesale sector's gain of 0.51% and the S&P 500's gain of 0.53%.
Analysts and investors alike will be keeping a close eye on the performance of Amazon in its upcoming earnings disclosure. The company is predicted to post an EPS of $1.82, indicating a 8.33% growth compared to the equivalent quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $196.9 billion, showing a 17.41% escalation compared to the year-ago quarter.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $8.86 per share and a revenue of $826.06 billion, indicating changes of +23.57% and +15.22%, respectively, from the former year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Amazon. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there's been a 0.39% rise in the Zacks Consensus EPS estimate. Currently, Amazon is carrying a Zacks Rank of #2 (Buy).
In terms of valuation, Amazon is currently trading at a Forward P/E ratio of 28.76. Its industry sports an average Forward P/E of 17.09, so one might conclude that Amazon is trading at a premium comparatively.
It is also worth noting that AMZN currently has a PEG ratio of 1.66. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The average PEG ratio for the Internet - Commerce industry stood at 1.09 at the close of the market yesterday.
The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 170, finds itself in the bottom 31% echelons of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
SEATTLE--(BUSINESS WIRE)--Amazon.com, Inc. (NASDAQ: AMZN) announced today that it will hold a conference call to discuss its second quarter 2026 financial results on Thursday, July 30, 2026, at 2:00 p.m. PT/5:00 p.m. ET.The event will be webcast live, and the audio and associated slides will be available for at least three months thereafter at www.amazon.com/ir.
The so-called "Magnificent Seven" group of stocks -- Apple, Alphabet (GOOGL 4.48%) (GOOG 4.46%), Amazon (AMZN 1.92%), Meta Platforms (META 2.65%), Microsoft, Nvidia, and Tesla -- has long traded at a premium to the S&P 500 index. For the past decade, the group has generally traded at a P/E about 30% above the benchmark index, but that premium has recently fallen to its lowest level ever, closer to just 10% above the benchmark. Much of that premium can be attributed to Tesla, which trades at a trailing P/E of over 350.
With the Magnificent Seven trading at its lowest-ever relative valuation, let's look at my three favorite stocks in the group to buy right now.
Image source: The Motley Fool.
Amazon The market share leader in both e-commerce and cloud computing, Amazon is one of the most underappreciated stocks in the market today. The stock has been a laggard over the last five years, up only around 35%. However, the company itself has been making big strides during this time.
While it has gotten little credit for it, Amazon has become the world's largest manufacturer and operator of robots, all of which run on its DeepFleet AI model. It's also adopted AI to help optimize things like delivery routes and inventory management. This has all made the company much more efficient and helped drive strong operating leverage in its e-commerce business.
Today's Change
(
-1.92
%) $
-4.90
Current Price
$
250.06
Meanwhile, the company is seeing accelerating revenue growth in its cloud computing business, and partnerships with Anthropic and OpenAI should help this continue. Amazon also has a strong chip business, having developed its own AI accelerators and central processing units (CPUs), which help give it a cost advantage.
Trading at a forward P/E of 25.5 times 2027 analyst estimates, the stock is attractively valued and is a solid long-term buy.
Alphabet Alphabet is not just a search giant; it's a strong collection of leading and emerging businesses. It's also become the most complete AI player, having developed its own world-class chips with its Tensor Processing Units (TPUs) and a frontier AI model in Gemini.
TPUs are Alphabet's secret sauce, giving it a big cost advantage over competitors that rely largely on Nvidia's expensive graphics processing units (GPUs). It uses its chips to train its AI model at a much lower cost than rivals, while it also lets it run inference much more cheaply. Its TPUs are so well regarded that Anthropic has placed huge orders for them.
Today's Change
(
-4.48
%) $
-16.61
Current Price
$
354.32
The company's cloud unit is seeing rapid growth, with revenue surging 63% in Q1, while it has embedded Gemini within Google search, helping drive query and revenue growth. Alphabet also owns YouTube and has a potential future growth driver with its Waymo robotaxi business, which is aggressively expanding to new cities across the U.S.
Trading at a forward P/E of 25 times 2027 estimates, Alphabet is one of my favorite stocks to own for the long term given its built-in advantages.
Meta Platforms A social media giant, Meta has been one of the best companies at using AI to help drive growth in its core business. It's developed its own models to help improve its recommendation algorithm, which is feeding users more of the content they are interested in and keeping them on its apps longer. At the same time, it's using AI to help advertisers better connect with and convert customers, which is driving up ad demand and prices.
Today's Change
(
-2.65
%) $
-18.02
Current Price
$
663.29
Meta grew its revenue at a brisk 33% pace last quarter, yet the stock only trades at a forward P/E of 18 times 2027 estimates. The company is also just starting to serve ads on its popular messaging platform, WhatsApp, and its new social media site, Threads, which should add another growth driver.
The biggest knock on the stock has been its aggressive AI infrastructure spending, but Meta looking to start a cloud computing service, given the high demand for compute power, helps allay those fears. Meanwhile, its latest Muse Spark 1.1 model has drawn strong praise.
The stock looks way undervalued given its growth and prospects.
As Amazon.com, Inc. (NASDAQ: AMZN) reported its fastest growth rate in Amazon Web Services (AWS) sales in nearly four years, Justin Patterson, an analyst at KeyBanc, maintained a bullish outlook.
Patterson reiterated a Buy rating on AMZN stock, according to a note to clients that Finbold analyzed on July 16. Additionally, he raised the firm’s 12-month price target for AMZN to $335 from $325, signaling a potential 30.8% upside.
The KeyBanc analyst named Amazon his preferred in the e-commerce stocks category. He cited two main drivers, including resilient underlying retail trends and AWS sales growth.
Patterson noted Wall Street’s estimates are understating Amazon’s trajectory, thereby positioning his revenue and EPS (earnings per share) forecasts for 2028 roughly 2% and 3% above consensus, respectively.
The analyst also raised his 2026 and 2027 revenue estimates for Amazon, driven largely by stronger AWS sales growth. Specifically, Patterson now expects AWS sales to climb 31% year over year in both years.
The new price target is anchored to a 25.5x multiple on his 2028 earnings-per-share projection. Furthermore, the firm anticipates Amazon’s net sales and operating income estimates of $1,079 billion and $178.6 billion, respectively, for 2028.
Is AMZN a good stock to buy? Ahead of the July 30 Amazon earnings call, Wall Street analysts believe that AMZN stock is a great choice, especially among e-commerce stocks. Furthermore, 46 analysts surveyed by TipRanks over the past three months have issued an average rating of Strong Buy.
Amazon stock forecast. Source: TipRanks Additionally, these analysts have set an average 12-month price target for AMZN stock at $318.98, implying a 24.81% upside. Notably, Amazon shares traded at about $255.57 at press time, up over 14% during the past 12 months.
AMZN stock 1-year chart. Source: Finbold As such, if Amazon continues to benefit from the ongoing AI boom, the analysts’ 12-month price target could be achieved, and vice versa.
Best Crypto Exchange for Intermediate Traders and Investors
Invest in cryptocurrencies and 3,000+ other assets including stocks and precious metals.
0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
Copy top-performing traders in real time, automatically.
eToro USA is registered with FINRA for securities trading.
30+ million Users worldwide
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.
Join Finbold's newsroom, become a Sales Executive today! Apply now to join Finbold as a crypto/finance news writer!
AMZN stock is moving. See the chart and price action here. AMZN – Overweight, $335 Price TargetIn a new note, the firm reiterates its Overweight rating on Amazon and nudges its price target up to $335 from $330, based on 25.5 times 2028 earnings, as it extends its valuation horizon and edges estimates above consensus into 2028.
At the center of the call is a simple trade‑off: KeyBanc sees near‑term margin pressure as the cost of entrenching AWS as a primary supplier of scarce AI compute.
The analysts raise 2026 and 2027 total net sales by less than 1% but mark AWS meaningfully higher, modeling 31% year‑over‑year growth in both years, versus Street expectations closer to the low‑30s.
The analysts also lift 2026 and 2027 operating income by 4% and 8%, respectively, and introduce 2028 projections that put revenue at about $1.08 trillion and operating income at roughly $178.6 billion.
Capex is where the call diverges sharply from consensus. Management has already signaled that faster AWS growth requires more up‑front spending, and KeyBanc leans into that message, penciling in 2027 and 2028 capital expenditures of $331 billion and $356 billion.
That compares with Street estimates of $235 billion and $241 billion, implying KeyBanc is underwriting a materially steeper investment curve as Amazon races to build data centers and secure power for AI workloads.
AWS Backlog SwellsThe firm ties that capex stance directly to a swelling AWS backlog and a series of long‑dated power and capacity deals. It expects AWS backlog to reach around $485 billion, driven largely by a $100 billion, 10‑year agreement signed with Anthropic in April.
Additional commitments from OpenAI and Anthropic — 2GW of power over eight years and 5GW over 10 years, respectively — are framed as structural demand signals, reinforcing the view that incremental compute remains both scarce and valuable.
The TakeawayIn that context, Amazon’s spend‑now posture becomes a rational strategy to deepen an AI infrastructure moat, even if it compresses near‑term margin upside.
KeyBanc’s message to investors: tolerate the capex surge and focus on what the firm sees as a durable, high‑growth AWS earnings stream stretching toward the end of the decade.
Photo: PJ McDonnell / Shutterstock
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Market News and Data brought to you by Benzinga APIs
I keep clicking buy on Amazon (NASDAQ:AMZN | AMZN Price Prediction), and I am not embarrassed to admit it. Every time the stock dips into the low $240s, I add. My cost basis keeps rising, my share count keeps rising, and my conviction gets louder with every filing.
Here is what pulls me back. Amazon is running the largest infrastructure buildout of my investing lifetime, and it already has the receipts to pay for it. The market keeps arguing about whether hyperscaler capex is discipline or waste. I look at the pre-committed contracts sitting behind the spend and see something Wall Street keeps glossing over.
The Backlog Nobody Wants to Talk About AWS carried a $364 billion commercial backlog into Q1 2026, and that figure does not include the recent Anthropic deal announced for over $100 billion. Andy Jassy told analysts “there is reasonable breadth in that as well, it is not just one customer or two customers.” Against that pipeline, AWS grew 28% year over year to $37.59 billion, the fastest pace in 15 quarters, at a 37.7% operating margin.
Then the silicon. Amazon’s chips business is running at a $20 billion annual revenue run rate, growing triple digits year over year. Trainium alone carries over $225 billion in revenue commitments. Jassy said “at scale, we expect Trainium will save us tens of billions of dollars of CapEx each year and provide several hundred basis points of operating margin advantage”. That is the math I keep chewing on. Amazon owns the chip stack for the AI workloads it can move in-house.
Third, the boring engine keeps compounding. Advertising crossed $70 billion in TTM revenue while growing 24%, and unit growth in Stores hit 15%, the highest since the tail end of covid lockdowns. Consolidated operating margin came in at 13.1%, the highest ever.
July 16 is the Final Day to Tap Into the Lithium Boom (sponsor)
General Motors, POSCO, and 50,000+ everyday investors have already backed lithium producer EnergyX.
Here's why you should do the same before their July 16 investment deadline: lithium prices are up 75% this year, with demand projected to grow a staggering 5X by 2040.
With tech that can recover up to 3X more lithium than traditional methods, EnergyX is preparing to unlock up to 15M+ tons. Become a private-stage EnergyX investor before the July 16 deadline.
Why Not Microsoft or Alphabet The question I get asked most: why not Microsoft (NASDAQ:MSFT) or Alphabet (NASDAQ:GOOGL)? I own the neighborhood. Amazon is where I keep adding. Microsoft leans on OpenAI’s roadmap for its differentiated AI story, and Google Cloud remains the third player in enterprise share. Amazon just booked OpenAI itself for approximately 2 GW of Trainium capacity beginning in 2027 and Anthropic for up to 5 GW. The two leading AI labs are now paying to run on Amazon silicon. At a trailing P/E of 29 against 76.65% year-over-year net income growth, I am paying below-market multiples for the fastest hyperscaler in the group.
The Real Risk The real risk is cash. Free cash flow TTM collapsed 95% to $1.2 billion as capex hit $44.2 billion in a single quarter, and long-term debt climbed to $119.1 billion from $65.6 billion year over year. The spend would scare me if it were speculative. Instead, Jassy said Amazon has “customer commitments for a substantial portion” of that 2026 spend, and the monetization window on new capacity runs 6 to 24 months against assets with 30+ year useful lives on data centers. The math works if you let it play out.
I keep buying because the backlog is signed, the silicon is shipping, the consolidated margin line just hit an all-time high, and the stock trades at $247.49 against an analyst consensus target of $312.91 with 62 buy ratings and zero sells. Until the receipts stop arriving, my finger stays on the buy button.
Meet America's Newest $1b Unicorn (Sponsor) A US startup just passed a $1 billion private valuation, joining billion-dollar private companies like OpenAI and ByteDance. Unlike those other unicorns, you can invest in EnergyX right now; but only until July 16.
Over 50,000 people already have, along with global giants like General Motors and POSCO.
Here's why there's so much interest: EnergyX's patented tech can recover up to 3X more lithium than traditional methods. That's a big deal, as demand for lithium is expected to 5X current production levels by 2040. Become an early-stage EnergyX shareholder before the 7/16 investment deadline.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
Amazon (NASDAQ:AMZN | AMZN Price Prediction) heads into its July 30, 2026 Q2 earnings report with the stock trading at $247.31 and Wall Street increasingly bullish on AWS re-acceleration. Our 24/7 Wall St. price target for Amazon is $318.02, implying 28.59% upside over the next 12 months. The recommendation is buy at 90% confidence.
24/7 Wall St. Price Target Summary Metric Value Current Price $247.31 24/7 Wall St. Price Target $318.02 Upside 28.59% Recommendation BUY Confidence Level 90% The Setup Heading Into Q2 Earnings Amazon is up 7.14% year to date and 9.91% over the trailing year, trading roughly 11% below the $278.56 52-week high.
Q1 2026 was strong: EPS of $2.78 crushed the $1.73 estimate, and revenue rose 16.6% to $181.52 billion. AWS grew 28% to $37.59 billion, the fastest pace in 15 quarters, powered by Trainium commitments from OpenAI and Anthropic. Advertising climbed 24% and now runs above $70 billion TTM. Management guided Q2 revenue to $194 billion to $199 billion.
Why Bulls See A Breakout Ahead The bull case rests on AWS. CEO Andy Jassy highlighted “our fastest growth in 15 quarters” and a chips business topped a $20 billion revenue run rate growing triple digits. Trainium2 is fully subscribed, OpenAI committed to 2 GW of Trainium capacity beginning 2027, and Anthropic secured up to 5 GW.
Advertising, AWS, and subscriptions drive margin mix higher. The analyst consensus target of $312.91 across 62 Buy, 4 Hold, and 0 Sell ratings aligns with our model. Our bull case points to $365.98 if AWS holds 28%+ growth and CapEx returns materialize faster.
What Could Go Wrong The bear thesis centers on capital intensity. Amazon guided $200 billion in 2026 CapEx, and TTM free cash flow collapsed 95% to $1.2 billion. Long-term debt jumped to $119.1 billion from $65.6 billion YoY.
Q1 net income was inflated by $16.8 billion in pre-tax Anthropic gains, and AWS operating margin ticked down from 39.5% to 37.7%. Bulls counter that adjusted operating income grew 30% and OCF rose 53%, meaning the cash drag reflects investment spending. Our bear case scenario is $275.53.
July 16 is the Final Day to Tap Into the Lithium Boom (sponsor)
General Motors, POSCO, and 50,000+ everyday investors have already backed lithium producer EnergyX.
Here's why you should do the same before their July 16 investment deadline: lithium prices are up 75% this year, with demand projected to grow a staggering 5X by 2040.
With tech that can recover up to 3X more lithium than traditional methods, EnergyX is preparing to unlock up to 15M+ tons. Become a private-stage EnergyX investor before the July 16 deadline.
How Amazon Compares To Microsoft And Alphabet Microsoft (NASDAQ:MSFT) trades at a P/E of 29x with operating margin near 46% and Azure growing 40%. Microsoft’s richer margins make Amazon’s 11% consolidated operating margin look like a margin-expansion story.
Alphabet (NASDAQ:GOOGL) trades at a P/E of just 16x, roughly half Amazon’s multiple, with Google Cloud growing 63% in Q1 2026. Alphabet is the cheapest comp, but Amazon’s dominant retail flywheel plus AWS scale justifies the premium.
Company P/E Operating Margin Amazon 34x 11% Microsoft 29x 46% Alphabet 16x 32% I’d Buy It Here I’d be a buyer if Q2 earnings on July 30 confirm AWS growth holding above 25% and Q3 revenue guidance clears consensus. I would stay on the sidelines if AWS decelerates below 24% or if management flags margin compression from tariff and energy costs.
The 24/7 Wall St. price target of $318.02 reflects a buy at 90% confidence, and the AWS AI backlog tips the scale. For readers hunting more names tied to this infrastructure wave, our 7 Stocks Powering the AI Boom report is worth reviewing.
Year 24/7 Wall St. Price Target 2026 $275 2027 $318 2028 $358 2029 $403 2030 $454 These projections assume Amazon executes on AWS AI monetization and CapEx converts to free cash flow by 2028. Significant upside could come from Trainium share gains against Nvidia, while recession or extended tariff war would compress the trajectory closer to our $345.19 five-year bear case.
Meet America's Newest $1b Unicorn (Sponsor) A US startup just passed a $1 billion private valuation, joining billion-dollar private companies like OpenAI and ByteDance. Unlike those other unicorns, you can invest in EnergyX right now; but only until July 16.
Over 50,000 people already have, along with global giants like General Motors and POSCO.
Here's why there's so much interest: EnergyX's patented tech can recover up to 3X more lithium than traditional methods. That's a big deal, as demand for lithium is expected to 5X current production levels by 2040. Become an early-stage EnergyX shareholder before the 7/16 investment deadline.
Amazon (AMZN - Free Report) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, AMZN broke out above the 50-day moving average, suggesting a short-term bullish trend.
One of the three major moving averages, the 50-day simple moving average is commonly used by traders and analysts to determine support or resistance levels for different types of securities. However, the 50-day is considered to be more important since it's the first marker of an up or down trend.
AMZN has rallied 7.4% over the past four weeks, and the company is a Zacks Rank #2 (Buy) at the moment. This combination suggests AMZN could be on the verge of another move higher.
The bullish case only gets stronger once investors take into account AMZN's positive earnings estimate revisions. There have been 1 higher compared to none lower for the current fiscal year, and the consensus estimate has moved up as well.
Given this move in earnings estimate revisions and the positive technical factor, investors may want to keep their eye on AMZN for more gains in the near future.
HomeEconomy & PoliticsEconomic ReportEconomic ReportIran war and high inflation have limited impactJuly 16, 2026, 8:41 a.m. ET
Fans buy snacks and drinks during the 2026 World Cup in Los Angeles Stadium Photo: AFP via Getty ImagesSales at retailers rose briskly in June as Americans bought more new cars and spent more online during Amazon’s annual summer sales event, signaling steady growth in the U.S. economy.
Sales at U.S. retailers increased 0.2% in June, the government said Thursday.
An Amazon fulfillment center Bloomberg/Getty Images Amazon is testing software to decide where warehouse workers should go. Some managers keep ignoring it.
Internal planning documents show the tech giant intends to expand these labor-management systems across dozens of its North American fulfillment centers and sort centers, where they could save hundreds of millions of dollars a year.
However, some warehouse managers have been overriding the software recommendations, asking engineers to disable automated features, and finding other ways around the systems, according to internal Slack conversations and the documents from earlier this year.
The pushback has been enough for Amazon to conclude that software recommendations alone aren't enough to get the new technology working as designed.
"Providing managers with optimized recommendations is necessary but insufficient," Amazon said in one of the documents. "Without system-enforced guardrails, manual overrides and habits erode even the best science."
The conflict highlights a broader challenge in automating warehouse management: software can make decisions, but people still have to follow the guidance. The documents and internal communications reviewed by Business Insider suggest getting managers to trust the software, and ultimately defer to its decisions, is proving more difficult than Amazon expected.
Competing philosophiesAmazon uses a growing mix of machine learning, computer vision, and other AI tools that increasingly guide staffing decisions traditionally made by managers.
Initially, those systems functioned as advisory tools. A program called DOPLERS calculates staffing plans, Full Facility Load Balancing recommends labor moves, and Right Link Station automatically tracks and captures check-in data for support staff.
But the internal documents reviewed by Business Insider show Amazon came to see manager discretion as an obstacle.
"Algorithm accuracy cannot be meaningfully measured without enforcement," one of the documents stated.
The documents reveal two competing philosophies of warehouse management. Some managers believe warehouses are still too dynamic for algorithms to understand every situation. Amazon, however, saw that too much human judgment prevented those algorithms from working as intended.
As a result, Amazon's strategy evolved to broader tracking of overrides and stricter enforcement planned over time.
"Hard enforcement is the end goal for 2026," one planning document stated.
"Iterate on the logic"
Amazon CEO Andy Jassy Bloomberg/Getty Images In an email ahead of publication, an Amazon spokesperson called this story's premise "wrong," saying the company is only piloting the technology at a small number of US facilities to help managers adjust staffing as package volumes change.
Managers still make staffing decisions, the spokesperson added, while the software system provides "better information" and is being refined based on testing and employee feedback before any broader rollout.
"As with all new systems, we continuously iterate on the logic — it takes time, testing, and iteration to get there — which is why it's inappropriate to draw broad conclusions during initial testing phases," the spokesperson said. "We always want to learn what's working for our employees, and what isn't, so we can make adjustments to get things right. That's what pilots are all about."
The spokesperson said the quotes and sentiments cited in the story came from an "early-stage planning document" that captured anecdotal observations during a pilot and "don't reflect how the system operates today." The issues were "not a widespread or ongoing concern," the spokesperson said, adding that the tools are intended to help managers make more consistent staffing decisions, not replace their judgment.
An Amazon spokesperson previously told Business Insider that broader expansion plans remain subject to change and that projected savings estimates are hypothetical because the systems are still being tested.
"Please turn if off"Still, the documents and internal communications reviewed by Business Insider suggest a deeper disagreement over who should make staffing decisions inside Amazon's warehouses.
Some managers often wanted to keep more workers assigned to their areas to maintain productivity or because they believed operations required more staffing than the software recommended, according to Slack messages from inside Amazon that were obtained by Business Insider.
Several managers overstaffed warehouse support roles and "hid hours through manual time edits," as some sites found "loopholes," Amazon said in the official internal documents.
The Amazon spokesperson told Business Insider that managers make staffing decisions based on what the company has learned about shopping patterns over the years, but "there will always be variations."
Internal Amazon Slack conversations from earlier this year show some managers at the company repeatedly asking to disable some of the automated staffing controls, or give warehouse leaders authority to do it themselves.
"Please turn it off now and I will explain," one warehouse manager wrote shortly after Amazon's enforcement effort launched at an early test site.
Minutes later, an Amazon product manager replied, "We will disable enforcement for now."
Some managers argued the software often lacked the context they had on the warehouse floor, noting that the system overreacted to a brief slowdown in package volume, recommending staffing cuts that didn't reflect real-time conditions.
Other managers complained the system pulled workers away from urgent areas, prevented them from reassigning idle employees, or left workers temporarily locked out of new assignments while different systems synchronized.
One manager said automated staffing changes caused packages to repeatedly circulate through the warehouse instead of being processed the first time, prompting a request to "disable the system until it gets fixed."
Another manager questioned whether the software could account for differences between workers. "Does it understand 6 foot three Henry that weighs 250 pounds is way better at chasing than 67-year old Henrietta that weighs under 100 pounds and doesn't reach 5 foot?" this person wrote in Amazon's internal Slack.
The Amazon spokesperson told Business Insider that the Slack channel included a "small handful of managers" and the comments "don't reflect the current state of the technology, since they're from a channel that was intended to provide constructive feedback on this initial pilot."
Amazon wants to double downThe conflict reveals something larger than a disagreement over warehouse software.
Historically, supervisors balanced labor using experience and local knowledge. Amazon wants software to make more of these decisions.
The official internal documents show Amazon interpreted manager workarounds less as evidence that automation had limits than as proof that recommendations alone wouldn't change behavior.
Internal Amazon roadmaps call for progressively tighter controls, including limits on how far managers can deviate from the algorithm. Amazon's own "Success Metrics" for 2026 mention a "reduction in manual staffing interventions by managers."
"Enforcement is our highest-leverage mechanism and we're doubling down," Amazon stated in one of the documents.
Have a tip? Contact this reporter via email at [email protected] or Signal, Telegram, or WhatsApp at 650-942-3061. Use a personal email address, a nonwork WiFi network, and a nonwork device; here's our guide to sharing information securely.
Read next
Eugene Kim You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Eugene is Business Insider’s Chief Tech Correspondent, where he leads coverage of Amazon. His reporting spans the company’s retail operations, AWS, Alexa, and its secretive internal work culture.Previously, he worked at CNBC, Fortune Magazine Korea, and Japan's Yomiuri Shimbun. He holds degrees from NYU and Columbia University’s Graduate School of Journalism.In 2022, Eugene broke a story uncovering Amazon’s practice of deceptively enrolling customers in Prime and deliberately making cancellation difficult. A year later, the Federal Trade Commission sued the company, citing his reporting. That case culminated in a record $2.5 billion settlement in 2025.His reporting has earned multiple honors, including the SF Press Club’s Bay Area Journalism Award and SPJ NorCal’s Excellence in Journalism Award.Eugene lives in the Bay Area. Contact him via email at [email protected], or Signal, Telegram, or WhatsApp at 650-942-3061. Use a personal email address, a nonwork WiFi network, and a nonwork device; here's our guide to sharing information securely. ExpertiseAmazon, Jeff Bezos, Andy Jassy, e-commerce, and cloud computing.Popular ArticlesAmazon:Internal Amazon emails give an exclusive look at how CEO Andy Jassy has started to run the company, with obsessive attention to the retail business and what some employees feel is micromanagingAndy Jassy will be the next CEO of Amazon. Insiders dish on what it's like to work for Jeff Bezos' successor, who built AWS into a $40 billion business.Internal documents show Amazon has for years knowingly tricked people into signing up for Prime subscriptions. 'We have been deliberately confusing,' former employee says.Inside Amazon's flailing brick-and-mortar ambitions: missed projections, pressure to cut costs, and a war with Whole FoodsInside Amazon's complex employee-review system, where workers feel left in the dark and managers expect to give 5% of reports bad reviewsAfter 28 years, 'Day 2' finally arrives at AmazonAWS, Alexa, healthcare:Inside Amazon's struggle to break into the lucrative market for SaaS business applications, including an internal pitch to buy $38 billion HubSpotInside Amazon's struggle to crack Nvidia's AI-chip dominanceAmazon's AI data center dream runs into the reality of 'zombie' facilities, higher costs, and labor shortagesAmazon is gutting its voice assistant, Alexa. Employees describe a division in crisis and huge losses on 'a wasted opportunity.'Amazon is working on a new 'Remarkable Alexa,' but internal politics and technical issues plague the projectAmazon projected huge losses from its healthcare business in 2024, but strong sales growth, internal document reveals
Retirement investors staring at Amazon (NASDAQ:AMZN | AMZN Price Prediction), Tesla (NASDAQ:TSLA), and Apple (NASDAQ:AAPL) heading into Q2 earnings face one simple question: which of these three Magnificent 7 names best deserves a spot in a long-duration portfolio right now?
Two of the big four artificial intelligence (AI) hyperscalers are Amazon (AMZN +2.97%) and Alphabet (GOOG +3.57%) (GOOGL +3.15%). These two are major players, yet they are deploying different strategies in the AI race.
Which one of these two is the better buy? Let's take a look, as they appear to be two entirely different companies on the surface.
Image source: Getty Images.
Cloud computing is a central focus for each Amazon is still mostly known as an e-commerce business, but I think investors should view it differently. It operates the largest cloud computing service in the world, Amazon Web Services (AWS), and it's a major part of the company. In fact, AWS generated 59% of Amazon's operating profit in Q1, despite accounting for only 21% of sales. That's because AWS' margins are far higher than the margins of Amazon's commerce segments. And with AWS growing at a 28% clip, the share of profits coming from it is likely to continue rising.
Alphabet is a large conglomerate, but the Google ecosystem still sits at the heart of the operation. The majority of its revenue comes from advertising, but it also has a cloud computing component.
Google Cloud is smaller than AWS, with revenue coming in at $20 billion during Q1 (versus AWS' $37.6 billion), but it's growing at a blazing fast 63% rate. However, Google Cloud doesn't give Alphabet quite the same profitability boost that AWS does for Amazon, as advertising is already a high-margin business. Still, it's a growing contributor to Alphabet's overall picture.
Today's Change
(
3.15
%) $
11.33
Current Price
$
370.84
Both companies are spending hundreds of billions of dollars a year on data center capital expenditures because they see a major opportunity in the cloud computing market, so they're investing heavily to build out computing capacity to capture a piece of it. This is a smart strategy, although it may take a handful of years for them to see the payoffs from it. Still, I think investors should give them some leeway, as they understand what customers demand in computing resources.
One difference between AWS and Google Cloud is that AWS doesn't have a native generative AI model, whereas Alphabet does. With Alphabet, users can deploy Google's Gemini family of AI models. With Amazon, investors can use a variety of AI models. While other AI models can be deployed on Google Cloud, it seems like the logical choice to go with its native model if you're using its ecosystem already. I don't think this is a huge difference maker, but it is something investors should be aware of.
Today's Change
(
2.97
%) $
7.36
Current Price
$
254.85
I don't see much separation between these two and how they run their businesses, so I'm scoring this category as a tie.
Winner: Tie
Solid top- and bottom-line growth From a revenue growth standpoint, Alphabet grew at a 22% pace during Q1, while Amazon grew at a 17% pace. Each of them also saw their earnings per share skyrocket, with Alphabet's growth once again outpacing Amazon's.
AMZN Revenue (Quarterly YoY Growth) data by YCharts.
There isn't a ton of debate about which is the faster-growing company, and forward projections point to the gap between them persisting. Wall Street expects 21% revenue growth for Alphabet for the remainder of 2026, and 19% growth next year. Analysts expect 15% growth for Amazon in 2026, and 13% next year. Clearly, Alphabet takes the prize here.
Winner: Alphabet
Both companies trade at a premium The market regards both Amazon and Alphabet highly, so it shouldn't come as a surprise that neither stock is cheap. However, I don't think either one is overvalued, either.
AMZN PE Ratio (Forward) data by YCharts.
Still, Amazon is the more expensive stock on a forward price-to-earnings basis, and the difference likely stems from each company's core business. Amazon's e-commerce business is far more stable over the long term than Alphabet's advertising business, which can face severe slowdowns when recessions strike (or even are just feared). However, with Alphabet's faster growth rate and cheaper stock price, I think it's the better buy now. That doesn't mean I think investors who own Amazon shares should sell them. I do still think Amazon is a worthy investment; it's just not as attractive to buy right now as Alphabet.
I keep hitting the buy button on Amazon (NASDAQ:AMZN | AMZN Price Prediction) for one reason most headlines still miss: the company has quietly built one of the three largest data center chip businesses on the planet, and the market is still pricing it like a retailer with a cloud attached.
That is the confession. Every time the stock drifts, I add. I keep buying because Andy Jassy said out loud on the last call that “our custom silicon business is now one of the top three data center chip businesses in the world” and the stock barely blinked.
The Silicon Case in Three Numbers Start with scale. The Trainium, Graviton, and Nitro chip business is running at a $20 billion annual run rate, growing triple-digit percentages year over year. Jassy noted that if it were sold externally like a traditional chip vendor, the equivalent run rate would be $50 billion. That is a top-tier semiconductor franchise hiding inside the AWS P&L.
Second, the customer book. Amazon has over $225 billion in revenue commitments for Trainium from multiyear deals with Anthropic, OpenAI, Uber, and others. AWS backlog on top of that is $364 billion, and that figure excludes the newer $100 billion Anthropic expansion. Backlogs of that size do not evaporate in a soft quarter.
Third, the economics. Trainium2 delivers about 30% better price performance than comparable GPUs and is largely sold out. Trainium3 is 30% to 40% more price performant than Trainium2 and is nearly fully subscribed. Jassy told investors Trainium will “save us tens of billions of dollars of CapEx each year and provide several hundred basis points of operating margin advantage”. AWS already earns a 37.7% operating margin on 28% year over year growth, the fastest pace in 15 quarters.
Why This One, Not the Obvious Alternative The reflex trade for AI infrastructure is NVIDIA (NASDAQ:NVDA), and I still own it. But Amazon is the company charging a 30% premium against NVIDIA silicon on its own cloud while continuing to buy NVIDIA chips too. That is the vendor and the competitor, and it pays either way.
The cloud reflex is Microsoft (NASDAQ:MSFT) or Alphabet (NASDAQ:GOOGL). Fine businesses. Neither is disclosing a $20 billion in-house chip run rate growing triple digits, and Amazon trades at a forward P/E of 29 with a PEG of 1.413, which does not feel expensive for a business compounding AWS at that rate.
The Real Risk The capex is the risk, full stop. Q1 alone burned $44.203 billion in cash capex, long-term debt climbed to $119.1 billion from $65.6 billion, and free cash flow TTM declined 95% to $1.2 billion. If Trainium adoption stalls, that math gets ugly. What keeps me buying is that prediction markets place a 98.4% probability capex clears $170 billion in 2026, and the $225 billion Trainium book is contracted revenue backing the spend, not hope. If you are still building an income-focused retirement stack around this kind of compounder, the framework in Never Touch the Principal is worth a look.
Forward Conviction Analyst consensus sits at $312.91 against a current $247.49, with 62 buy or strong-buy ratings and zero sells. I am buying the fact that Amazon is turning its own capex into its own supply chain, and every Trainium rack shipped is a dollar not sent to a competitor. I keep the buy button warm.
Key Takeaways Amazon's AWS revenues rose 28% in Q1 2026, its fastest growth in 15 quarters, driven by AI demand.AMZN posted record Prime Day sales and guided Q2 net sales to $194-$199B with up to 19% growth.Amazon cites AI, advertising, grocery and newer businesses as growth drivers despite higher AI spending. Amazon (AMZN - Free Report) appears overvalued at a forward 12-month price/earnings ratio of 25.98X, higher than the Zacks Internet – Commerce industry's 21.95X. Amazon has a Value Score of D.
Yet a premium multiple does not tell the whole story on its own. Three developing catalysts, spanning cloud demand, consumer resilience and a broadening mix of revenue streams, suggest Amazon's near-term setup still favors buyers willing to look past the headline ratio, even as elevated infrastructure spending and fresh regulatory noise keep the stock's path from being entirely smooth in the months ahead.
AMZN’s P/E Ratio Depicts Stretched Valuation
Image Source: Zacks Investment Research
AWS Reacceleration Anchors the Bull CaseAmazon's cloud engine is firing again. AWS revenues grew 28% year over year in the first quarter of 2026 to $37.6 billion, its fastest growth pace in 15 quarters, as enterprises leaned harder into generative AI workloads running on Amazon's infrastructure. Bedrock customer spend climbed 170% quarter over quarter, and Amazon's custom silicon business, spanning Trainium and Graviton chips, crossed a $20 billion annual revenue run rate while growing at triple-digit percentages, with more than $225 billion in Trainium-related revenue commitments already on the books.
Management has continued expanding AWS' AI stack through the summer, adding OpenAI's latest models and a Codex coding agent to Bedrock, launching Bedrock Managed Agents, and rolling out AgentCore tools for enterprise-grade AI agents at AWS Summits in New York and Washington. AWS also confirmed a 20% July price increase on GPU-linked EC2 Capacity Blocks, a signal that AI compute demand remains tight enough to support pricing power even as the company races to add capacity. A swelling AWS backlog, boosted further by large multi-gigawatt compute commitments from external AI partners such as OpenAI and Anthropic, underscores demand visibility well beyond the current quarter and supports the case for sustained double-digit cloud growth into 2027.
Record Prime Day and Encouraging GuidanceAmazon's June 23-26 Prime Day event generated a record $26.4 billion in U.S. online sales, roughly 9% higher than a year earlier, reinforcing the strength of its 180-million-plus Prime membership base heading into the back half of 2026. That reading follows a first-quarter beat in which net sales rose 17% to $181.5 billion, advertising revenues grew 24% to $17.2 billion, and operating income reached a record 13.1% margin.
For the second quarter, management guided net sales toward $194 billion to $199 billion, representing growth of 16% to 19%, and operating income of $20 billion to $24 billion, with guidance explicitly assuming Prime Day activity landed inside the quarter. Retail unit growth of 15%, the fastest pace since the pandemic era, and a regionalized fulfillment network that has already supported more than a billion same-day or overnight deliveries this year, point to an e-commerce engine that keeps gaining efficiency alongside scale.
The Zacks Consensus Estimate for AMZN's 2026 earnings is pegged at $8.86 per share, indicating a 23.57% increase from the figure reported in the year-ago quarter.
AMZN’s Diversified Growth Engines Widen the MoatBeyond cloud and retail, Amazon's advertising business has grown into a roughly $70 billion trailing 12-month revenue stream, while the grocery business has become one of the largest food retailers in the country, with more than $150 billion of 2025 gross sales. Newer bets are also maturing: Amazon LEO's commercial satellite service is on track for a third-quarter launch, and Amazon Quick, an AI work assistant unveiled this summer with a new desktop app, is expanding across enterprise integrations alongside agentic hiring and supply-chain tools introduced at recent AWS events.
Elevated capital expenditures, guided toward roughly $200 billion for 2026, have compressed trailing free cash flow and drawn investor scrutiny, and a pending FTC inquiry into advertising disclosures adds a layer of regulatory overhang worth monitoring. Even so, management frames the AI infrastructure buildout as demand-backed rather than speculative, pointing to signed compute commitments as evidence that today's spending is underwriting tomorrow's revenues rather than sitting idle.
Taken together, a reaccelerating cloud franchise, a resilient consumer signal from Prime Day, and expanding, less cyclical revenue streams give investors reason to look past the premium multiple, provided capital spending discipline holds, and overall cloud growth continues to comfortably outrun the rising cost of building it all out over the coming quarters.
Share Price Movement and the Cloud Competitive LandscapeAmazon shares have jumped 5.2% in the past six-month period against the industry and the Zacks Retail-Wholesale sector's decline of 2.8% and 4.4%, respectively. AMZN shares have been notably volatile through 2026, retreating sharply from a 52-week high near $278 in late May to trade closer to the mid-$240s by mid-July, even after a record Prime Day and a well-received first-quarter earnings report, as investors continue to digest roughly $200 billion in planned annual capital spending on AI infrastructure.
AMZN’s 6-Month Price Performance
Image Source: Zacks Investment Research
AWS still leads global cloud infrastructure, but Microsoft's (MSFT - Free Report) Azure remains its closest rival, layering OpenAI's models and Copilot across its enterprise software stack to defend its share. Alphabet (GOOGL - Free Report) -owned Google Cloud has kept gaining ground through Gemini-linked AI tooling and custom TPU chips, while Oracle (ORCL - Free Report) has emerged as a faster-growing, AI-training-focused challenger through large data-center contracts. Microsoft and Google both continue investing heavily in proprietary silicon, much like Amazon, and Oracle's expanding cloud infrastructure backlog shows how contested the AI compute race between Amazon, Microsoft, Google and Oracle has become heading into the second half of 2026.
Bottom LineAmazon's blend of reaccelerating cloud growth, a record Prime Day, and expanding advertising and grocery revenues makes a reasonable case for near-term buyers, even at a premium multiple. Heavy AI capital spending and regulatory scrutiny remain watchpoints, but execution across AWS, retail and newer bets keeps the growth story intact. Amazon currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Amazon Leo is displayed during the Delivering the Future EMEA 2026 event at Amazon's LCY3 fulfilment centre in Dartford, Britain, June 4, 2026. REUTERS/Toby Shepheard/File Photo Purchase Licensing Rights, opens new tab
JOHANNESBURG, July 15 (Reuters) - Amazon's (AMZN.O), opens new tab low-earth orbit satellite internet venture Amazon Leo has signed an agreement with South Africa's Herotel to launch a new broadband service aimed at connecting underserved rural communities, it said on Wednesday.
Under the agreement, Herotel, South Africa's largest fixed internet service provider, will use Amazon Leo's satellite technology to offer a new service called evry, which is expected to launch commercially in 2027 for residential customers.
The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here.
The deal comes as satellite internet providers race to expand in Africa. SpaceX's Starlink is also seeking to enter the South African market, but is awaiting proposed changes to licensing rules that could allow foreign satellite operators to meet local ownership and empowerment requirements through alternatives to equity stakes.
Amazon Leo and Herotel said their partnership would help address a longstanding connectivity gap in South Africa, where millions of people living on farms, in small towns and rural communities remain beyond the reach of reliable internet services because conventional fibre and wireless networks are often uneconomical to deploy.
Financial details of the agreement were not disclosed.
"This collaboration is about breaking down barriers and unlocking opportunity for millions of people who don't yet have reliable access for work, education, or the services they depend on," David Zapolsky, Amazon's chief global affairs and legal officer, said in a statement.
Herotel, owned by Maziv, serves more than 350,000 customers across over 550 towns through fibre and fixed wireless networks and operates 120 offices nationwide. The company said that footprint would allow it to provide installation, customer service and field operations for the satellite service from launch.
Earlier this year, Amazon Leo signed an agreement with Vodafone (VOD.L), opens new tab to link Vodafone's network to base stations in hard-to-reach locations in Africa, through its South Africa subsidiary Vodacom (VODJ.J), opens new tab.
Reporting by Nqobile Dludla; Editing by Sanjeev Miglani
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Nqobile is a Johannesburg-based reporter covering the South African retail, telecom and tech sectors. She has been a journalists for about 10 years. She joined Reuters in 2015 and has covered a variety of beats ranging from pharma, health to property and banking.
Key Takeaways Pony AI is expanding robotaxi services significantly and targets more than 20 cities globally by end-2026. Uber is scaling autonomous rides through partners including WeRide and Amazon's Zoox. Pony AI benefits from China's fast-growing robotaxi market and a largely domestic supply chain. The robotaxi market has huge potential, as evidenced by the fact that the market, which was valued at $0.4 billion in 2023, is expected to reach $45.7 billion in 2030, at a compound annual growth rate of 91.8% during 2023-2030, according to Markets and Markets. This highly lucrative space attracts both Pony AI (PONY - Free Report) , an autonomous-driving company based in Guangzhou, China, and ride-hailing company Uber Technologies (UBER - Free Report) . Let's delve into the autonomous vehicle or AV-related details for the two companies.
AV Ambitions of UberUber aims to gain a stronghold in the robotaxi market through strategic partnerships. By adopting this approach, Uber has avoided the massive R&D costs associated with developing autonomous systems independently. In 2020, Uber sold the self-driving division but retained its focus on becoming the ultimate ride-hailing super app.
In line with its partnership-driven strategy, last month, Uber, in collaboration with WeRide (WRD - Free Report) , a Chinese autonomous vehicle company, announced plans to introduce commercial robotaxi services in the Greater Zurich Region. This move represents their second joint deployment in Europe, coming just weeks after the announcement of a similar initiative in Madrid.
Since December 2024, WeRide and Uber have introduced robotaxi services across several Middle Eastern markets, including fully driverless commercial operations in Abu Dhabi and Dubai, as well as public services in Riyadh. These deployments provide an operational foundation for their European expansion.
Earlier in the year, Uber entered into a strategic partnership with Amazon’s (AMZN - Free Report) Zoox to deploy its purpose-built robotaxis on the former’s platform. The Amazon unit’s robotaxis differ from many other autonomous vehicles currently in development because they are not modified versions of traditional passenger cars. Instead, the vehicles are purpose-built specifically for ride-hailing services and designed to enhance rider comfort and social interaction. The Amazon unit and Uber indicated that Zoox rides are expected to be available in Los Angeles next year.
Uber’s dominant market share in the ride-hailing industry also gives it a unique advantage in the AV space. With its vast network of drivers and customers, Uber can quickly scale autonomous services once the technology matures. Its app is designed to integrate AVs from multiple partners, giving users a variety of options.
Taking a Look at PONY’s Role in the Robotaxi FieldSupporting the AV growth strategy, PONY recently announced that its autonomous mobility service in Singapore, operated in partnership with ComfortDelGro, can now be booked through ComfortDelGro's Zig app. The introduction of consumer-facing app access represents the next phase of the service's rollout in Punggol, broadening availability beyond the initial invitation-only trial and moving toward a more scalable, customer-oriented operating model.
Since June 22, residents and visitors in Singapore's Punggol district have been able to book autonomous rides using the Zig app. After confirming a reservation, passengers travel in Zig-branded vehicles equipped with PONY's self-driving technology along designated routes across northern Punggol.
Since introducing its "dual-engine" growth strategy earlier this year, the Chinese autonomous driving company has continued to broaden its robotaxi presence across both domestic and international markets. These expansion efforts reinforce management's goal of extending its footprint to more than 20 cities worldwide by the end of 2026.
Within China, PONY has further expanded its presence in several strategic markets, including deeper coverage of Guangzhou's urban core. Its operating network now spans the Haizhu District and reaches major high-traffic destinations, including the Canton Tower and the Pazhou business district.
How Do UBER And PONY’s Key Metrics Stack UpShares of both PONY and UBER have declined in double digits (% wise) over the past year, even though the latter’s drop is less steep.
1-Year Price ComparisonImage Source: Zacks Investment Research
See how the Zacks Consensus Estimate of UBER and PONY’s earnings for 2026 and 2027 has been revised over the past 30 days.
Earnings Estimate Revisions for UBERImage Source: Zacks Investment Research
Earnings Estimate Revisions for PONYImage Source: Zacks Investment Research
ConclusionWhile Uber continues to make progress in AV technology, the path to large-scale commercialization is expected to remain lengthy. Regulatory approvals and compliance requirements could slow the commercialization of its AV business. In addition, concerns persist that the widespread adoption of self-driving vehicles may eventually lessen the need for intermediary ride-hailing platforms such as Uber.
Meanwhile, Pony AI has firmly positioned itself as one of the leading companies in the autonomous driving space. The company is also relatively well insulated from tariff-related uncertainties as most of its supply chain is domestically sourced. Moreover, China's robotaxi market, where Pony AI is a major participant, continues to expand at a rapid pace. Supported by favorable government policies, a sizable addressable market and an efficient local supply chain, China is strengthening its position as a global hub for autonomous driving innovation and robotaxi deployment.
Based on our analysis, PONY seems a better pick than UBER now.
While PONY carries a Zacks Rank #2 (Buy), UBER currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Amazon veteran Dave Brown, a senior vice president in Amazon Web Services and member of the elite internal group advising CEO Andy Jassy, is leaving the company after 19 years.
A longtime executive in Amazon's cloud unit is leaving the tech giant after nearly 19 years, the company announced Wednesday.
Dave Brown, a senior vice president in Amazon Web Services, plans to depart at the end of this month for "a new role outside of the company," AWS CEO Matt Garman wrote in a note to staffers. Brown will be replaced by Dave Treadwell, a top executive in Amazon's e-commerce division, Garman said.
"Dave has been a big part of what we have built at AWS, and I want to personally thank him for all of his contributions in helping grow and develop the technology, the business and the team," Garman wrote.
Brown joined AWS in its infancy and was a member of the early team that assembled its core EC2 service in South Africa in the 2000s, according to his LinkedIn profile. EC2, one of AWS' oldest services, provides virtual slices of physical servers for rent, billed by the second, that companies use to run applications and websites.
Read more CNBC tech newsAlibaba's U.S.-listed shares rise after Qwen AI set to be integrated in Apple IntelligenceASML stock climbs after hiking sales forecast for second time this year on strong AI chip demandCurrent and former employees sue Meta, alleging discrimination in using AI to conduct layoffsApple in talks with startup that shrinks AI models to run on an iPhoneMore recently, Brown's responsibilities expanded to include AWS' compute and machine learning services, such as its Bedrock and SageMaker offerings. He's also part of Amazon CEO Andy Jassy's vaunted S-team, a highly influential group of 28 executives that report to Jassy and meet with him regularly to make key business decisions.
In a separate memo, Brown said it felt "like the right time for me to begin a new chapter" and added that his organization is "in outstanding hands" under Treadwell.
"He's an exceptional leader with deep technical expertise, relentless customer focus, and a genuine passion for building strong teams," Brown wrote.
Brown's departure comes as AWS has benefited from strong demand for artificial intelligence services, helping the unit record 28% revenue growth in the first quarter. Cloud rivals Microsoft and Google have also been riding a surge in AI-related spending.
— CNBC's Jordan Novet contributed reporting to this article.
Amazon (AMZN +3.44%) is a company that's done a terrific job of expanding its business over the years. Not only is it an e-commerce giant, but many companies rely on its cloud business, Amazon Web Services (AWS), and that has become a major source of profit for the entire company. Amazon has also gotten involved in robotaxis, grocery stores, and healthcare.
One of its most promising new opportunities, however, could involve selling artificial intelligence (AI) chips.
Image source: Getty Images.
Why selling chips could be a huge part of Amazon's business in the future Amazon's top AI chip, Trainium, was built with a heavy focus on efficiency and scale. It's effectively built by a company that needs to scale AI efficiently, making it ideal for tech companies looking to reduce costs and improve the profitability of their AI ventures.
CEO Andy Jassy stated in the company's letter to shareholders that "there's so much demand for our chips that it's quite possible we'll sell racks of them to third parties in the future." Jassy estimates that the annual run rate for a theoretical chip business could be around $50 billion. That total includes the revenue that the stand-alone business would generate from AWS, but it's nonetheless a positive sign of the type of growth that Amazon is seeing from this area of its operations.
Last year, Amazon reported $717 billion in revenue. If the company generated an extra $50 billion in cash, that would represent growth of 7%. But with a large chunk of that likely related to AWS, the true growth rate would likely be far more modest. However, if the company prioritized that area of its operations, it could become a major growth catalyst in the future.
Today's Change
(
3.44
%) $
8.52
Current Price
$
256.01
Amazon's stock looks undervalued It's a bit surprising that Amazon's stock isn't doing much better given the opportunities in AI. In just the past 12 months, it's risen by around 10% -- far below the S&P 500's 20% gain over that stretch. It's lagged the market, despite the business continuing to grow and expand.
For investors, now may be an ideal time to buy the stock, as it's trading at a price-to-earnings multiple of around 30, which is extremely low when compared to the average stock in the Technology Select Sector SDPR ETF, which trades at a multiple of 38.
Amazon is a beast in the tech sector, and it can be a fantastic stock to just buy and hold for the long term, as it continually reminds investors that it isn't running out of growth opportunities anytime soon.
Relationship expected to support continued deployment of Infinity Battery Technology across material handling operations and potential for expanded engagement around Electrovaya’s battery platforms for robotics and energy storage July 15, 2026 08:52 ET | Source: Electrovaya Inc.
TORONTO, July 15, 2026 (GLOBE NEWSWIRE) -- Electrovaya Inc. (“Electrovaya” or the “Company”) (Nasdaq: ELVA, TSX: ELVA), a leading lithium-ion battery technology and manufacturing company, today announced a commercial agreement and a warrant transaction with Amazon (Nasdaq: AMZN). This relationship is expected to support the continued deployment of Infinity Battery Technology in material handling operations and potential expanded engagement on robotics and energy storage.
Electrovaya’s energy storage systems are based on the Infinity Technology which has a perfect field safety record, enables reduced environmental footprint and lower total cost of ownership compared to conventional lithium-ion technologies. Systems currently under development combine the Company’s proprietary Infinity lithium-ion technology with high-power architectures for data center, industrial and logistics applications with enhanced safety, cycle life, and rapid charging capability.
"Electrovaya's Infinity Battery Technology has demonstrated real performance in demanding material handling environments, and this agreement with Amazon reflects our confidence in the opportunity ahead. We look forward to building on that foundation in other industrial applications where safety and longevity are critical." — Raj DasGupta, Chief Executive Officer, Electrovaya
As part of the agreement, Amazon will receive warrants to purchase up to 13,880,345 common shares of Electrovaya, which become fully vested upon Amazon achieving cumulative future purchases of US$280 million, with a portion of the warrants vesting immediately upon execution of the agreement, and an exercise price based on the 5-day volume weighted average trading price (“VWAP”) immediately prior to the date of the agreement.
Additional Information
The Corporation intends to file a material change report in respect of the transactions described in this news release, which will be available under the Corporation’s profile on SEDAR+ and corresponding filings on EDGAR. Copies of the relevant material agreements relating to the warrant transaction will also be filed with applicable Canadian and United States securities regulators.
The Toronto Stock Exchange has conditionally approved the listing of the common shares issuable pursuant to the Warrants, subject to the satisfaction of customary listing conditions.
The foregoing summary of the Warrants and related transactions is qualified in its entirety by the full text of the applicable transaction documents to be filed by the Corporation.
Amazon Media Contact:
Alexandra Miller
Principal, Business & Corporate Development Communications [email protected]
About Electrovaya Inc.
Electrovaya Inc. (NASDAQ: ELVA; TSX: ELVA) is a technology-driven lithium-ion battery company commercializing its proprietary Infinity Battery Technology, designed for superior safety, longevity, and performance in mission-critical industrial, robotics, defense and energy-storage applications. The Company leverages a strong intellectual-property portfolio and advanced materials expertise to deliver durable, high-value battery solutions to global OEMs and end users. To support growing demand and advancing energy-security and national-security objectives, Electrovaya is expanding U.S. manufacturing through its 52-acre Jamestown, New York site, which includes a 137,000-square-foot facility planned as its first gigafactory. Electrovaya also operates two Canadian sites focused on research, engineering, and product commercialization. For more information, please visit www.electrovaya.com.
Forward-Looking Statements
This press release contains forward-looking statements including with respect to the expectation that the agreement between Electrovaya and Amazon will contribute to revenue and be meaningfully accretive to Electrovaya’s earnings and cash flows over time, provide other benefits and opportunities including but not limited to potential adoption of Electrovaya’s products and technology in new applications such as energy storage, autonomous vehicles, robotics; the performance-based vesting of the warrants to be issued to Amazon and the listing of the underlying shares on the Toronto Stock Exchange and Nasdaq. Such forward-looking statements can generally be identified by the use of words such as “may”, “will”, “could”, “should”, “would”, “likely”, "possible", “expect”, “intend”, “estimate”, “anticipate”, “believe”, “plan”, “objective”, “seed”, “growing” and “continue” (or the negative thereof) and words and expressions of similar import. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors and assumptions are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. Statements with respect to new technologies, products and production roadmaps, aggregate sales are based on an assumption that the Company’s customers and users, including Amazon, will collaborate on development of and deploy its products in accordance with communicated intentions. Important factors that could cause actual results to differ materially from expectations include but are not limited to macroeconomic effects on the Company and its business and on the Company’s customers, including inflation and tightening credit availability due to systemic bank risk, economic conditions generally and their effect on consumer demand and capital availability, labor shortages, supply chain constraints, and end users’ demand for and use of products, which effects are not predictable. Additional information about material factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found in the Company’s Annual Information Form for the year ended September 30, 2025 under “Risk Factors”, and in the Company’s most recent annual Management’s Discussion and Analysis under “Qualitative And Quantitative Disclosures about Risk and Uncertainties” as well as in other public disclosure documents filed with Canadian securities regulatory authorities. The Company does not undertake any obligation to update publicly or to revise any of the forward-looking statements contained in this document, whether as a result of new information, future events or otherwise, except as required by law.
Amazon (AMZN +0.18%) recently announced that it would spend at least €10 billion ($11.4 billion) to modernize its European fulfillment network with robots over the next few years. These robots include Proteus, its fully autonomous warehouse robot; STARK, which picks up heavy bins from conveyor belts and stacks them into carts; and Vulcan, its first tactile-sensing robot that can handle a wide variety of packaging shapes and materials with extreme precision.
Will Amazon's robotics expansion create headwinds for Symbotic (SYM +2.90%), or could it accelerate the automation arms race and drive its stock even higher?
Image source: Getty Images.
What does Symbotic do? Symbotic develops fully autonomous warehouse robots that process pallets and cases. It claims a $50 million investment in just one of its modules (which includes its robots and software) can generate $250 million in savings over 25 years.
Today's Change
(
2.90
%) $
1.23
Current Price
$
43.66
Walmart (WMT 0.94%) is Symbotic's largest customer and one of its top investors. Symbotic generated 85% of its revenue from Walmart in fiscal 2025 (which ended last September), and it holds a contract to automate all of its U.S. regional distribution centers by 2034. Symbotic also acquired Walmart's own robotics division in early 2025, and the two companies are co-developing automated micro-fulfillment systems for individual stores.
Symbotic's other smaller customers include Target, Albertsons, C&S Wholesale, and GreenBox -- a warehouse-as-a-service joint venture it formed with its other major investor, SoftBank.
Why Amazon's move could be great news for Symbotic Amazon's new warehouse robots might initially seem like a threat to Symbotic, since the e-commerce giant could eventually sell its robots to third-party customers to offset its own spending. However, most of Symbotic's revenue still comes from Amazon's top competitor, Walmart, which will likely ramp up its own robotics spending in response to Amazon's accelerated investments.
That automation "arms race" could also drive other retail giants to sign more deals with Symbotic and its industry peers. According to Fortune Business Insights, the warehouse automation market could expand at a 16.1% CAGR from 2026 to 2034 as more of those tailwinds kick in.
From fiscal 2025 to fiscal 2028, analysts expect Symbotic's revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to grow at CAGRs of 26% and 73%, respectively.
With an enterprise value of $3.2 billion, it still looks undervalued at one times this year's sales and 10 times its adjusted EBITDA. Therefore, this underappreciated robotics stock could still be a great long-term play on the booming warehouse automation market.
Leo Sun has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Symbotic, Target, and Walmart. The Motley Fool has a disclosure policy.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
The Operator’s Era at Amazon When Amazon (NASDAQ:AMZN | AMZN Price Prediction) handed the keys to Andy Jassy on July 5, 2021, the stock was coming off a pandemic sugar high. Jassy, the architect of AWS, inherited a bloated cost structure and a valuation that had already priced in the future. His response was unglamorous: layoffs, a return-to-office push, a 20-for-1 stock split in 2022, and a brutal focus on retail margins.
Then came the pivot to AI. Under Jassy, Amazon’s custom chip business (Graviton, Trainium, Nitro) crossed a $20 billion annual run rate, posting triple-digit year-over-year growth, and AWS landed compute commitments from OpenAI (roughly 2 GW of Trainium starting 2027), Anthropic (up to 5 GW), and Meta. Advertising quietly ballooned to over $70 billion TTM. Kuiper/Leo satellites and Zoox robotaxis remain optionality plays.
Your $10,000 Bought Business Progress, Not Fireworks Here is how that Jassy-day stake looks today, along with standard benchmarks:
Jassy Tenure (July 6, 2021, to July 14, 2026)
Initial Investment: $10,000 Current Value: $13,466 (34.66% total return) S&P 500 (same period): $17,366 (73.66%) Amazon S&P 500 1-Year Return 9.66% 20.33% 5-Year Return 36.31% 72.93% 10-Year Return 573.04% 248.34% The uncomfortable truth: Jassy’s tenure has trailed a simple index fund by a wide margin. That is less about execution and more about the entry price he inherited. The operational story is stronger: AWS grew 28% in Q1 2026 (its fastest in 15 quarters) at a 37.7% operating margin, and EPS of $2.78 came in well ahead of the $1.65 consensus.
Grading Jassy, and What Comes Next Our grade for Jassy: B+. Retail margins are healthier, AWS reaccelerated, and the AI infrastructure land grab has materialized. The stock lag is a valuation inheritance issue, not a strategy failure. Points off for long-term debt climbing to $119.1 billion from $65.6 billion, as well as TTM free cash flow collapsing 95% to $1.2 billion as capex ramps.
With Bezos still executive chair and the AI capex cycle intensifying, speculation about an eventual leadership change will grow if returns stay muted. While nothing suggests a near-term change is imminent, investors should not assume Jassy runs Amazon for another decade.
The Bull and Bear Case From Here A $10,000 stake in Amazon today makes sense for investors who believe the roughly $200 billion of 2026 capex earns a real return through AWS AI workloads, advertising, and Trainium adoption. However, those who think Anthropic-related gains inflate earnings, masking a P/FCF that has ballooned, and that tariff risk threatens retail will want to shy away from the stock. Analysts are overwhelmingly bullish, and their $312.91 consensus target suggests room to run. The setup skews constructive, but the easy money on this stock was made before Jassy took over.
Meet America's Newest $1b Unicorn (Sponsor) A US startup just passed a $1 billion private valuation, joining billion-dollar private companies like OpenAI and ByteDance. Unlike those other unicorns, you can invest in EnergyX right now; but only until July 16.
Over 50,000 people already have, along with global giants like General Motors and POSCO.
Here's why there's so much interest: EnergyX's patented tech can recover up to 3X more lithium than traditional methods. That's a big deal, as demand for lithium is expected to 5X current production levels by 2040. Become an early-stage EnergyX shareholder before the 7/16 investment deadline.
Amazon.com Inc (NASDAQ:AMZN) is well-positioned heading into its second-quarter earnings report, according to Jefferies, which reiterated the e-commerce and cloud computing giant as a top pick, citing resilient consumer spending during Prime Day, accelerating Amazon Web Services (AWS) growth and what it views as a discounted valuation.
Jefferies wrote that its proprietary survey of 685 consumers indicated that Prime members continued to increase spending despite inflationary pressures. Among shoppers who participated in Prime Day this year and last year, 54% reported spending more than 10% more year over year, while Amazon remained the preferred shopping destination for many consumers.
Jefferies wrote that its survey indicated Prime members increased their spending during this year's Prime Day, with 54% of returning participants reporting they spent more than 10% more than a year earlier. The analysts also highlighted that higher prices have not discouraged shoppers, noting that 25% of respondents said they use Amazon more to seek value amid inflation.
Beyond retail, Jefferies highlighted AWS as a key driver heading into the quarter. The firm expects AWS backlog growth to continue accelerating from the 93% year-over-year increase reported in the first quarter and approach $500 billion, supporting further revenue growth.
Jefferies expects AWS revenue growth of about 32% in the second quarter, while noting investor expectations are for growth of more than 33%, compared with 28% growth in the first quarter.
The analysts also highlighted several indicators supporting AWS demand, including Anthropic's expanded long-term cloud commitment, recent EC2 price increases and growing demand for AI inferencing workloads.
On valuation, Jefferies wrote that Amazon trades at approximately 12 times next-12-month enterprise value to EBITDA, below Alphabet at roughly 17 times and Walmart at about 19 times, as well as below Amazon's own 10-year average multiple.
Shares traded hands at $247 on Tuesday afternoon, up about 7% so far this year.
Jefferies highlighted that Amazon shares have fallen about 7% since first quarter results, which it views as creating a more attractive entry point. The analysts maintained that improving AWS fundamentals and resilient retail performance support a favorable risk-reward profile.
Looking ahead to the earnings release, Jefferies noted that investors will be watching capital expenditure guidance and free cash flow, signs of continued AWS demand, and the impact of Prime Day shifting into the second quarter this year, which could create more challenging retail comparisons in the third quarter.
Amazon.com Inc (NASDAQ:AMZN) is well-positioned heading into its second-quarter earnings report, according to Jefferies, which reiterated the e-commerce and cloud computing giant as a top pick, citing resilient consumer spending during Prime Day, accelerating Amazon Web Services (AWS) growth and what it views as a discounted valuation.
Jefferies wrote that its proprietary survey of 685 consumers indicated that Prime members continued to increase spending despite inflationary pressures. Among shoppers who participated in Prime Day this year and last year, 54% reported spending more than 10% more year over year, while Amazon remained the preferred shopping destination for many consumers.
Jefferies wrote that its survey indicated Prime members increased their spending during this year's Prime Day, with 54% of returning participants reporting they spent more than 10% more than a year earlier. The analysts also highlighted that higher prices have not discouraged shoppers, noting that 25% of respondents said they use Amazon more to seek value amid inflation.
Beyond retail, Jefferies highlighted AWS as a key driver heading into the quarter. The firm expects AWS backlog growth to continue accelerating from the 93% year-over-year increase reported in the first quarter and approach $500 billion, supporting further revenue growth.
Jefferies expects AWS revenue growth of about 32% in the second quarter, while noting investor expectations are for growth of more than 33%, compared with 28% growth in the first quarter.
The analysts also highlighted several indicators supporting AWS demand, including Anthropic's expanded long-term cloud commitment, recent EC2 price increases and growing demand for AI inferencing workloads.
On valuation, Jefferies wrote that Amazon trades at approximately 12 times next-12-month enterprise value to EBITDA, below Alphabet at roughly 17 times and Walmart at about 19 times, as well as below Amazon's own 10-year average multiple.
Shares traded hands at $247 on Tuesday afternoon, up about 7% so far this year.
Jefferies highlighted that Amazon shares have fallen about 7% since first quarter results, which it views as creating a more attractive entry point. The analysts maintained that improving AWS fundamentals and resilient retail performance support a favorable risk-reward profile.
Looking ahead to the earnings release, Jefferies noted that investors will be watching capital expenditure guidance and free cash flow, signs of continued AWS demand, and the impact of Prime Day shifting into the second quarter this year, which could create more challenging retail comparisons in the third quarter.
Amazon.com, Inc. earns a Strong Buy rating as it aggressively invests in future growth, notably through its Leo satellite network. Q1 saw robust 17% sales growth and AWS's fastest acceleration in 15 quarters, but free cash flow dropped sharply due to heavy CapEx. Leo, Amazon's satellite internet venture, is poised for commercial launch in Q3, with multi-billion-dollar revenue potential and major customers already under contract.
When investors think of top tech stocks, it's often the "Magnificent Seven" that come to mind. These are the most successful, valuable, and high-profile names in the sector. They have incredible growth prospects while being some of the safer stocks to own for the long haul.
This year, however, has been a bit more challenging for the Magnificent Seven as investors have grown concerned about high spending on tech and artificial intelligence (AI). The spotlight isn't as much on growth as it is on return or investment, specifically when it comes to AI.
There's one stock in the group that stands out the most today, not only for its relatively modest valuation but also because it may have the most upside: Amazon (AMZN 0.38%).
Image source: Getty Images.
Amazon has tremendous growth opportunities ahead AI has been a big part of Amazon's business for years, as the company has used robots in its warehouses to add efficiency. It's always been involved in cutting-edge tech in one way or another. These days, the tech company is front and center with generative AI, as it now has a shopping assistant on its e-commerce sites to help shoppers find what they're looking for.
In addition, the company has been investing in autonomous driving, and Zoox, a wholly owned subsidiary, has begun offering robotaxi rides in multiple cities across the country. Amazon has also considered selling its highly efficient Trainium AI chips to customers, which could generate billions in revenue.
Amazon, which has generated an incredible $91 billion in profit over the trailing 12 months, has deep pockets that can fund its many ventures, which is why it can be a top growth stock to own, especially given its relatively modest-looking valuation. Currently, it trades at around 30 times its trailing earnings, which is far lower than the levels it's been at in previous years.
Today's Change
(
-0.38
%) $
-0.94
Current Price
$
246.37
The stock can be an excellent pillar for any portfolio Amazon's stock is up just 7% this year, in what has been a lackluster start for the tech giant; the S&P 500 has risen by approximately 10%. With so many growth opportunities driven by AI, it's a stock many investors may be overlooking right now while they chase the latest, hottest trends. Meanwhile, with a robust business and varied opportunities, Amazon may end up being one of the best AI stocks to own, without the risk of smaller, more speculative options.
This is a top stock to own for the long haul, and it can be a solid pillar to build any portfolio around and hang on to for not just years but potentially decades.
Amazon (AMZN - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Over the past month, shares of this online retailer have returned +0.5%, compared to the Zacks S&P 500 composite's +1.3% change. During this period, the Zacks Internet - Commerce industry, which Amazon falls in, has gained 4.6%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
For the current quarter, Amazon is expected to post earnings of $1.82 per share, indicating a change of +8.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +1% over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $8.86 points to a change of +23.6% from the prior year. Over the last 30 days, this estimate has changed +0.4%.
For the next fiscal year, the consensus earnings estimate of $10.09 indicates a change of +13.9% from what Amazon is expected to report a year ago. Over the past month, the estimate has changed +0.7%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Amazon is rated Zacks Rank #2 (Buy).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Amazon, the consensus sales estimate for the current quarter of $196.9 billion indicates a year-over-year change of +17.4%. For the current and next fiscal years, $826.06 billion and $933 billion estimates indicate +15.2% and +12.9% changes, respectively.
Last Reported Results and Surprise HistoryAmazon reported revenues of $181.52 billion in the last reported quarter, representing a year-over-year change of +16.6%. EPS of $1.56 for the same period compares with $1.59 a year ago.
Compared to the Zacks Consensus Estimate of $177.84 billion, the reported revenues represent a surprise of +2.07%. The EPS surprise was -2.5%.
Over the last four quarters, Amazon surpassed consensus EPS estimates two times. The company topped consensus revenue estimates each time over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Amazon is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Amazon. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.
This is a fair market value price provided by Massive. Learn more.
52-Week Range$196.00▼
$278.56P/E Ratio29.29
Price Target$312.79
Something interesting is happening at the intersection of Amazon.com Inc.'s NASDAQ: AMZN growth story and the broader AI investment boom, and equity investors would be wise to pay attention.
Shares of Amazon are trading just below $250, up around 8% from the end of June, but still well below the May high of almost $280. The stock has been caught in a tug-of-war between long-term believers and short-term skeptics, and the latter camp has just been served fresh evidence.
Get Amazon.com alerts:
The trigger was Amazon's $25 billion bond raise last week, which drew much weaker demand than the enormous rounds of AI-related debt issuance that preceded it. The stock itself has held up relatively well, suggesting equity investors are still buying into the long-term thesis.
However, the muted reception in the bond market is the kind of subtle signal that's worth taking seriously.
What Actually Happened With the Bond RaiseAmazon's $25 billion bond raise saw demand peak at around $62 billion before settling at about $41 billion, leaving a final oversubscription ratio of about 1.6 times the deal size.
On the face of it, that looks decent. But context matters, and the average investment-grade corporate deal in the U.S. this year has seen orders coming in at about four times the size of the deal itself.
In other words, Amazon's bond raise was subscribed at less than half the average level of interest the broader U.S. corporate market has been enjoying. The company also had to offer wider new-issue concessions to price the deal, which is another way of saying it had to sweeten the terms to get investors comfortable.
For a company as large, profitable, and strategically important as Amazon, that's a notable data point.
The Cost of the AI Buildout Is Starting to ClimbHyperscalers have been issuing debt at an unprecedented rate to fund the AI buildout, with last year alone seeing more than $120 billion of bonds issued by AI-focused giants. That was over four times the average of the previous five years.
Bond markets have been absorbing that supply relatively enthusiastically until recently, but Amazon's deal is the clearest sign yet that the endless enthusiasm might be fading.
SpaceX NASDAQ: SPCX also raised $25 billion of investment-grade bonds last month, and its debt weakened significantly in secondary markets almost immediately. Add this in, and the picture is starting to look like that of a bond market beginning to demand a higher return for what it perceives as growing risk.
For a company like Amazon, which is projected to spend close to $200 billion this year, most of it on AI infrastructure, that shift in tone matters. Amazon will likely continue to need to raise capital to fund its aggressive spending plans, and if the bond market becomes increasingly expensive to tap, the cost of that spending will start to climb.
The Difference Between Spending Cash and Spending DebtThe bigger picture is that AI-related debt issuance globally has now reached roughly $335 billion this year alone, more than double the total for 2025. That's an extraordinary amount of borrowed money being funneled into a single sector, and the assumption underlying it all is that the returns will eventually justify the borrowing.
Amazon CEO Andy Jassy has been consistent in describing AI as a "once-in-a-lifetime opportunity" that requires aggressive investment, and Amazon's track record of turning long-term bets into dominant businesses is second to none. But the question the bond market is starting to ask, and one equity investors should be paying attention to, is whether the industry as a whole is over-committing at the wrong pace.
There's a real distinction between investing your own money and investing money that must be repaid. When a downturn eventually arrives, however far away it might be, companies that have funded their growth predominantly with debt tend to feel the pinch faster than those that have relied on cash.
Where That Leaves the StockAmazon.com Stock Forecast Today12-Month Stock Price Forecast:
$312.79
27.95% Upside
Moderate Buy
Based on 60 Analyst Ratings
Current Price$244.46High Forecast$370.00Average Forecast$312.79Low Forecast$218.00Amazon.com Stock Forecast Details
The long-term case for Amazon remains as strong as ever, with AWS accelerating, corporate spending plans increasing, and the broader AI buildout still in its early innings.
The analyst community remains firmly bullish, with fresh price targets consistently set comfortably above $300.
But the bond market's muted reception last week is a caution flag worth watching. Bond investors have a long track record of sniffing out problems before equity investors catch on.
While the bearish sentiment still lacks real conviction, it's certainly starting to whisper.
Should You Invest $1,000 in Amazon.com Right Now?Before you consider Amazon.com, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Amazon.com wasn't on the list.
While Amazon.com currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Robotics and automation are rapidly becoming essential infrastructure across healthcare, manufacturing, logistics, and many other industries.
"Physical AI" is coming to the United States, and there are four ways that investors can gain exposure to this new robotics revolution. Plus, learn which seven companies are most positioned to benefit as intelligent robots enter the workforce.
Amazon’s chief executive put a number on the AI arms race, and it reframes the entire investment thesis for long-term holders.
The Number $200 billion.
That’s what Amazon (NASDAQ:AMZN | AMZN Price Prediction) plans to spend on capital expenditures across the company in 2026, aimed primarily at AI infrastructure, custom chips, robotics, and low-earth-orbit satellite buildout. CEO Andy Jassy disclosed the figure on the Q4 2025 earnings call on February 5, 2026, telling investors: “We expect to invest about $200 billion in capital expenditures across Amazon.com, Inc., but predominantly in AWS, because we have very high demand.” This figure is forward capital expenditure guidance for 2026.
What It Means The scale of this outlay is without recent precedent inside Amazon itself. Full-year 2025 capex already reached $131.8 billion, up from $83.0 billion in 2024 and $16.9 billion in 2019. The 2026 plan pushes that trajectory higher, funding the physical layer of a business that is monetizing capacity as fast as it can install it.
The demand signal is real. AWS revenue reached $37.59 billion in Q1 2026, up 28% YoY, its fastest growth in 15 quarters, at a 37.7% operating margin. Amazon’s custom chip business, spanning Graviton, Trainium, and Nitro, is now running at a $20 billion-plus annualized run rate with triple-digit YoY growth. Committed customer demand includes roughly 2 GW of Trainium capacity for OpenAI starting 2027, up to 5 GW of Trainium chips for Anthropic, and 1 million-plus NVIDIA GPUs to be deployed starting 2026.
Market Reaction Shares closed at $197.75 on February 5, 2026, the day the $200 billion figure was announced. By the April 29, 2026 Q1 filing, the stock was at $259.67. As of July 1, 2026, the price was $241.70, with a year-to-date gain of 4.71% and a one-year gain of 9.63%. The one-month change stands at -7.49%, reflecting recent hyperscaler capex debate, and shares traded at $244.11 on July 2, 2026.
Bull Case The case rests on unit economics that are already working at scale. Q1 2026 EPS came in at $2.78 versus a $1.73 estimate, a 60.69% beat and the fifth consecutive EPS beat. Revenue was $181.52 billion, up 16.61% YoY, with operating income of $23.85 billion, up 29.6% YoY. Advertising is running at a $70 billion-plus trailing 12-month rate, growing 24% YoY.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Amazon didn't make the cut. Grab the names FREE today.
Custom silicon is the lever that turns capex into durable margin. Trainium 2 delivers 30-40% better price performance than comparable GPUs, and Trainium 3 offers up to 40% better price performance than Trainium 2, with nearly all supply expected to be committed by mid-2026. Graviton is used by over 90% of AWS’s top 1,000 customers. CFO Brian Olsavsky framed the operating leverage bluntly: “When you are growing 24% year over year with an annualized revenue run rate of $142 billion, you are growing a lot. And what we are continuing to see is as fast as we install this capacity, this AI capacity, we are monetizing it.”
The balance sheet can carry the load. Operating cash flow reached $139.5 billion in 2025, up 20.4% YoY, and net income hit $77.7 billion. Analyst sentiment is heavily positive, with 15 Strong Buy and 47 Buy ratings versus 4 Hold and zero Sell ratings, and a consensus target of $312.99.
Bottom Line For long-term holders, the $200 billion figure is the price of admission to a business Amazon believes will reshape its economic profile. Free cash flow will be compressed near-term, with TTM FCF at $1.2 billion and long-term debt at $119.1 billion, and management has offered no explicit ROI timeline.
The forward catalyst is management’s own guide: Q2 2026 net sales of $194.0 billion to $199.0 billion (16% to 19% YoY growth) and operating income of $20.0 billion to $24.0 billion. If AWS growth holds near the 28% rate and chip revenue keeps compounding, the $200 billion becomes an investment in scarce infrastructure that competitors cannot replicate quickly. Jassy’s own framing sets the bar: “anticipate strong long-term return on invested capital.” The number is the thesis.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Amazon didn't make the cut. Grab the names FREE today.
Blue Origin's May 28 explosion of its reusable, heavy-lift New Glenn rocket was a serious setback. It destroyed the rocket and damaged the only operational launchpad for Blue Origin's heavy-lift rocket program. The company was trying to prove that its rocket could serve major customers, including Amazon's (AMZN 0.38%) satellite internet network, NASA's Artemis lunar program, and U.S. national security missions.
CEO Dave Limp expects New Glenn to return to flight before the end of 2026. However, Blue Origin is not just repairing the old setup. Instead, Blue Origin is moving to a new launch process that could help it recover more quickly. But the real test is whether it can fix the reliability problems and prove New Glenn can launch safely on a regular basis.
Image source: Getty Images.
Blue Origin is turning a setback into a redesign Although Blue Origin lost the lightning tower, transporter-erector, and hydraulic cylinders, several important parts of the launch site survived. The tank farm, integration facility, vehicle access tower, and water tower were still usable or repairable. That makes a full rebuild less likely and a 2026 return easier to believe.
The bigger change is how New Glenn will launch. The company does not plan to replace the old transporter-erector used to move and raise the rocket at the launchpad. Instead, Blue Origin now plans to assemble the rocket in one area, move it to the pad, lift it upright with a crane, and then attach the customer's payload. The company says this approach was already planned for a larger future version of New Glenn.
New Glenn is built for heavy satellite, government, and lunar missions. If Blue Origin can fix the reliability issues, the setback could still help push the company toward a stronger launch system.
Customer demand New Glenn's recovery matters because Blue Origin has real customers lined up. Amazon plans to use New Glenn for 12 Project Kuiper satellite launches, with options for 15 more. Amazon Leo had deployed around 400 satellites by early July 2026 and expects to begin initial service later in 2026. But with a planned 3,236-satellite network, Amazon still needs many more launches to build meaningful coverage and capacity.
Today's Change
(
-0.38
%) $
-0.95
Current Price
$
246.36
NASA has also contracted with Blue Origin for its second Artemis lunar lander contract. This has tied New Glenn's reliability to Blue Origin's moon plans.
Reuters also reported that Blue Origin is seeking $10 billion in funding at a $130 billion valuation, with Jeff Bezos expected to add $2 billion. The money could help repair launch infrastructure and support New Glenn's return to flight, but investors will expect repeated, reliable launches.
The biggest risk, however, is still reliability. Blue Origin said it was still investigating the May failure, but early signs pointed to the engine area at the bottom of the New Glenn rocket. New Glenn also had a problem in April with its upper rocket section, which left AST SpaceMobile's BlueBird-7 satellite in the wrong orbit.
Blue Origin was already coming off an April flight problem, after which the U.S. Federal Aviation Administration said nine corrective actions had to be verified before the next New Glenn launch. The May 28 ground-test explosion added a separate setback. So even if New Glenn returns to flight in December, Blue Origin will still need repeated safe launches to prove the rocket is reliable.
Amazon's (AMZN +0.86%) cloud computing segment, Amazon Web Services (AWS), is arguably its most important unit right now. It is growing its sales faster than the rest of the business, is responsible for most of its operating profits, and given the large remaining opportunity in this niche, AWS could be a key growth driver for a long time. However, what will happen to Amazon as more corporations enter the cloud industry and seek to compete with AWS? Meta Platforms (META 1.79%), Facebook's parent company, is reportedly exploring doing just that. Let's discuss the potential implications for Amazon.
Image source: The Motley Fool.
It's not a one-winner-takes-all market According to some reports, Meta Platforms' CEO, Mark Zuckerberg, is looking to launch a cloud business and sell excess artificial intelligence (AI) computing capacity. The tech leader has been investing heavily in its AI-related ambitions, and it could get a return on that investment by renting out unused GPU (Graphics Processing Unit) capacity to other corporations. This would put Meta Platforms in direct competition with several cloud leaders, including Amazon. However, the e-commerce specialist and its shareholders shouldn't be too worried. Here are three reasons why.
First, AI infrastructure spending has been growing rapidly. According to some estimates, it reached $318 billion in 2025, up almost 108% from 2024. Some analysts think it could exceed $1 trillion by 2029. This will be a major tailwind for Amazon, but there is space here for multiple winners, potentially including Meta Platforms. Second, Amazon sells much more than AI computing capacity, although that has become an important part of its cloud business. Still, AWS offers a full stack of cloud services beyond AI. Customers can build and operate entire technology infrastructures on AWS rather than simply rent computing power.
Today's Change
(
0.86
%) $
2.11
Current Price
$
247.45
Third, Amazon's AWS benefits from a wide moat thanks to switching costs. So, it should remain a leader in this niche. The company has survived -- and even thrived -- despite increased competition from Microsoft (MSFT +1.68%) and Alphabet (GOOG 1.16%) (GOOGL 1.23%). In fact, Amazon's cloud revenue has accelerated over the past two quarters. This highlights Amazon's ability to fend off the competition and continue riding the cloud computing tailwind. Besides, there are many reasons beyond its booming cloud business to invest in the stock. Amazon is implementing initiatives that could help decrease costs within its e-commerce business, which still generates the bulk of its sales.
Elsewhere, the company continues to ramp up its high-margin advertising unit that should help boost profits and margins over the long run. Amazon also has other growth avenues, including its healthcare-related efforts and a new business line in which it will open its logistics network to other corporations. For all those reasons (and many more), Amazon remains an attractive long-term bet, even as it may face more competition in the cloud computing industry.
Prosper Junior Bakiny has positions in Alphabet, Amazon, and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.
SummaryAmazon is rated a strong buy, trading at a historically low price-to-operating cash flow ratio despite robust fundamentals.AWS and Advertising are AMZN's fastest-growing, highest-margin segments, driving both revenue acceleration and operating cash flow margin expansion.Custom silicon and robotics investments are materially improving AWS growth, cost structure, and margin outlook across Amazon's business lines.Customer concentration risk from Anthropic and OpenAI in the AWS backlog warrants monitoring, but diversified customer revenue remains healthy.hapabapa/iStock Editorial via Getty Images
Investment Thesis Amazon (AMZN) is an excellent company that needs no introduction. Despite this, it seems underappreciated by the market currently, having underperformed the S&P 500 over the previous year. At its current valuation, I believe it is presenting
85 Followers
Analyst’s Disclosure: I/we have a beneficial long position in the shares of AMZN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
SummaryAmazon is launching Amazon Supply Chain Services, leveraging its logistics infrastructure for external customers beyond its core e-commerce, AWS, and advertising businesses.ASCS targets residential parcel delivery, offering lower rates and simpler pricing to attract third-party volume, improving network utilization and operational efficiency.Base and strong case scenarios suggest ASCS could contribute 2–5% of annualized operating income, with the primary benefit being cost savings in Amazon’s retail logistics.I rate AMZN a Buy, as ASCS enhances logistics economics and offers upside potential beyond AWS and AI, with further value possible from freight and international expansion. hapabapa/iStock Editorial via Getty Images
Amazon (AMZN) traditionally has three businesses: e-commerce, Amazon Web Services, and advertising. Soon, a fourth business is going to be added to this. This is ASCS, or Amazon Supply Chain Services.
In May, Amazon opened
141 Followers
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Information in Investor’s Business Daily is for informational and educational purposes only and should not be construed as an offer, recommendation, solicitation, or rating to buy or sell securities. The information has been obtained from sources we believe to be reliable, but we make no guarantee as to its accuracy, timeliness, or suitability, including with respect to information that appears in closed captioning. Historical investment performances are no indication or guarantee of future success or performance. Authors/presenters may own the stocks they discuss. We make no representations or warranties regarding the advisability of investing in any particular securities or utilizing any specific investment strategies. Information is subject to change without notice. For information on use of our services, please see our Terms of Use.
*Real-time prices by Nasdaq Last Sale. Real-time quote and/or trade prices are not sourced from all markets. Ownership data provided by LSEG and Estimate data provided by FactSet.
IBD, IBD Digital, IBD Live, IBD Weekly, Investor's Business Daily, Leaderboard, MarketDiem, MarketSurge and other marks are trademarks owned by Investor's Business Daily, LLC.
Amazon's (AMZN +1.57%) valuation has done something surprising. Even though a 29 price-to-earnings (P/E) ratio may not sound cheap, the stock is coming off its lowest valuation since the financial crisis.
The company operates in competitive industries such as retail and cloud computing, and its spending on capital expenditures (capex) likely scared some investors. Nonetheless, Amazon's P/E ratio does not drop below 30 often. Knowing that, has the sell-off in the consumer discretionary stock gone too far, or are Amazon's days of commanding high valuations over?
Image source: Amazon.
The state of Amazon It is easy to understand why Amazon's capex spending concerns many investors. It pledged to spend $200 billion on capex in 2026 alone. This is not unusual in today's tech industry but is more than the $175 billion to $185 billion from Alphabet or the $125 billion to $145 billion pledged by Meta Platforms.
Moreover, despite its $143 billion in liquidity, the capex spending reduced free cash flow to just $1.2 billion over the trailing 12 months. Consequently, it sold bonds this year to help cover capex costs, including an issuance of at least $25 billion this month. Considering its massive liquidity, such an act would have seemed unimaginable until recently.
Today's Change
(
1.57
%) $
3.86
Current Price
$
249.20
However, investing in artificial intelligence (AI) seems to have improved the company's performance, including in its e-commerce segments. In the first quarter of 2026, net sales rose by 17% year over year, close to double the 9% annual increase reported in Q1 2025.
In the same quarter, net income increased by 77% year over year, even more than the 64% annual increase in Q1 2025. Considering that growth, investors might perceive 29 times earnings as a historically cheap valuation. Still, analyst estimates call for a more modest 21% increase in profits for the year, a significant slowdown that could cool investor enthusiasm about the lower P/E.
Considering Amazon's history, capex spending, and improved results, Amazon appears to be in oversold territory. Admittedly, the P/E ratio shows the stock has not become a screaming bargain, as the heavy capex spending and coming slowdown in profit growth may understandably give investors pause.
Nonetheless, Amazon is clearly making that investment to stay competitive in AI. Moreover, seeing its P/E ratio fall below 30 is unusual, even with the more conservative profit growth forecasted by analysts.
Additionally, the capex spending has helped boost net sales growth and brought massive profit increases in recent quarters. Assuming net income grows by well above 21%, Amazon stock could regain some traction.
Ultimately, such an improvement is speculation, and it is unclear whether Amazon has bottomed. Still, if one wants to begin building an Amazon position, now is probably a good time to start that process.
The market is selling Amazon over falling free cash flow, a $200 billion capex program, and circular AI financing, whilst I see all three as reasons to buy. Advertising generated $17.24 billion in the quarter, with software-like margins that the market still values as part of a retailer. Retail automation is a second catalyst. AWS backlog stands at $364 billion (excluding a $100B+ Anthropic deal), with diversified customers and custom silicon driving competitive advantage.
On June 17, 2026, Jeff Bezos stood on a stage in Paris and told the world: “We’re going to have labor scarcity. People are pessimistic because a bunch of smart people are telling them to be pessimistic.” His company had cut 16,000 jobs five months earlier, in January 2026, citing AI as a driver. That contradiction defines the 2026 labor market.
Speaking at VivaTech 2026, as reported by Fortune, Fox Business, and The Hill, Bezos delivered a bull case worth hearing in full before the data pushes back.
Bezos’s Argument AI raises productivity, lowers costs, and creates more demand than the current workforce can meet. A bulldozer did not eliminate construction workers. When ATMs arrived, banks opened more branches and hired more customer-facing staff. Jevons Paradox: when a tool gets cheaper, people use more of it. Radiologists and software engineers get “elevated” rather than replaced. AI-driven productivity could lower the cost of essentials and let some dual-income households choose to have one earner step back. His clearest line: “AI is going to create a labor shortage.”
The Data That Contradicts Him Across tech, more than 115,000 jobs were cut through May 2026. Challenger, Gray & Christmas reported that of more than 97,000 total job cuts in May, US employers cited AI as the leading reason for 38,579, about 40% of all cuts. Goldman Sachs estimates AI is eliminating roughly 16,000 US jobs per month, with Gen Z absorbing the heaviest impact. An HR Digest analysis pinned 22% of all 2026 layoffs on AI. Microsoft AI CEO Mustafa Suleyman warns most white-collar tasks could be automated within 18 months.
Both sides may be right about different timeframes. Gartner projects AI will create more jobs than it eliminates beginning in 2028. Aggregate labor data still looks resilient: unemployment sat at 4.2% in June 2026, JOLTS openings rose to 7.59M in May, and average hourly earnings climbed to $37.64. Macro tightness supports Bezos’s directional claim; the monthly cut data supports the pessimists.
The Amazon Irony Amazon (NASDAQ:AMZN | AMZN Price Prediction) is funding the future Bezos describes while thinning the workforce along the way. In Q1 2026, CEO Andy Jassy reported AWS revenue of $37.587 billion, up 28% year over year, the fastest growth in 15 quarters, alongside capital expenditures of $44.203 billion in a single quarter and full-year 2026 capex guidance of approximately $200 billion (see the Q1 2026 8-K). Jassy told analysts an internal service rebuild that “would have taken 40 or 50 people about a year” was completed by “five really smart, AI-forward-thinking people” in 65 days. That productivity gain is precisely what makes the labor picture ambiguous.
July 16 is the Final Day to Tap Into the Lithium Boom (sponsor)
General Motors, POSCO, and 50,000+ everyday investors have already backed lithium producer EnergyX.
Here's why you should do the same before their July 16 investment deadline: lithium prices are up 75% this year, with demand projected to grow a staggering 5X by 2040.
With tech that can recover up to 3X more lithium than traditional methods, EnergyX is preparing to unlock up to 15M+ tons. Become a private-stage EnergyX investor before the July 16 deadline.
Shares reflect the market’s tentative endorsement: AMZN is up 6.29% year to date to $245.34.
The Investing Angle If AI expands demand for human labor, the infrastructure layer rides a multi-decade capex cycle. NVIDIA (NASDAQ:NVDA) is up 13.25% YTD, Broadcom (NASDAQ:AVGO) up 15.99%, and Alphabet (NASDAQ:GOOGL) up 14.26%. Microsoft has lagged at down 20.02% YTD, a reminder that even winners in the buildout face digestion risk.
If millions need new skills, retraining plays become structural beneficiaries. Coursera (NYSE:COUR) reported more than 20 generative AI enrollments per minute in Q1 2026, though the stock is down 22.42% YTD to $5.71 as enterprise growth lags consumer.
What Workers Should Do The most exposed roles are entry-level, task-based, and undifferentiated. The roles that survive are the elevated ones: oversight, auditing, specialized AI engineering, and training. Bezos may be right about where AI takes the labor market. Workers cut in January 2026 need a bridge to get there. The central question of 2026 is how long the transition takes. Retrain now.
Meet America's Newest $1b Unicorn (Sponsor) A US startup just passed a $1 billion private valuation, joining billion-dollar private companies like OpenAI and ByteDance. Unlike those other unicorns, you can invest in EnergyX right now; but only until July 16.
Over 50,000 people already have, along with global giants like General Motors and POSCO.
Here's why there's so much interest: EnergyX's patented tech can recover up to 3X more lithium than traditional methods. That's a big deal, as demand for lithium is expected to 5X current production levels by 2040. Become an early-stage EnergyX shareholder before the 7/16 investment deadline.
Ted Thatcher talks about his expectations for the second quarter of the earnings season believing Amazon (AMZN), Alphabet (GOOGL) and Meta Platforms (META) have strong stories right now. He looks inside the recent divergence between hyperscalers and chipmakers and says he expects more chops on semiconductors.
I hit the buy button on Amazon (NASDAQ:AMZN | AMZN Price Prediction) again last week, and I plan to do it again this month. The louder the crowd complains about the $200 billion capex bill, the more convinced I am they are staring at the receipt while ignoring the meal being served.
Amazon is using its retail and logistics cash engine to fund a cloud infrastructure moat that competitors cannot easily replicate, and the enterprise AI commitments already stacked on top of it read like a decade of pre-paid revenue.
The Data Behind the Conviction AWS revenue reached $37.6 billion in Q1 2026, growing 28% year over year, the fastest pace in 15 quarters, on a base now running at $150 billion annualized. The AWS backlog sits at $364 billion, excluding the recent $100+ billion Anthropic deal. Those are signed contracts in the queue.
Amazon’s chips business (Graviton, Trainium, Nitro) crossed a $20 billion annual revenue run rate in Q1 2026 with triple-digit growth. OpenAI committed to roughly 2 GW of Trainium capacity starting 2027, and Anthropic secured up to 5 GW. CEO Andy Jassy called the unit “one of the top three data center chip businesses in the world”, with Trainium commitments alone over $225 billion.
Advertising crossed $70 billion in TTM revenue, unit growth in Stores hit 15%, and consolidated operating margin reached 13.1%, the highest ever. Return on equity sits at 24.3%, with interest coverage at 35x.
Why Not Microsoft or Alphabet Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) are obvious alternatives. Amazon is out-committing them on infrastructure while demand is already contracted. FactSet consensus pegs 2026 capex at $127.55 billion for Amazon versus $95.99 billion for Microsoft and $92.9 billion for Alphabet. AWS growth at 28% outpaces peer cloud growth. The hyperscaler pouring the most concrete when the customer roster already includes OpenAI, Anthropic, Meta, Uber, U.S. Bank, and the U.S. Army stands out on the infrastructure thesis.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Amazon didn't make the cut. Grab the names FREE today.
The Real Risk Trailing twelve-month free cash flow collapsed to $1.2 billion, a roughly 95% drop, and long-term debt climbed to $119.1 billion from $65.6 billion. Jassy addressed it directly: “in times of very high growth like now, where the CapEx growth meaningfully outpaces the revenue growth, the early years’ free cash flow is challenged until these initial tranches of capacity are being monetized.” Data centers carry 30-plus year useful lives, and chips and servers run five to six years. I am comfortable waiting for the monetization curve to meet the spending curve.
What Keeps the Buy Button Active The stock trades at $247.04, up only 7.03% year to date and 11.01% over the past year. Wall Street’s consensus target sits at $312.91, with 47 buy and 15 strong buy ratings against 4 holds and zero sells. A P/E near 32 for a company compounding operating cash flow at 20%+ with structural pricing power in the fastest-growing tier of enterprise computing is a bargain I keep taking.
For deeper reading on where the AI buildout money lands beyond chipmakers, our team’s 7 Stocks Powering the AI Boom (That Aren’t Chipmakers) report walks through picks I keep on my watchlist alongside this one.
I keep buying Amazon because the capex the market fears today is the exact invoice for the revenue the market has not yet learned to count.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Amazon didn't make the cut. Grab the names FREE today.
Over the last few years, large language models (LLMs) have burst onto the scene with unprecedented speed. What once felt like science fiction -- chatbots that can reason, write, code, and converse almost like humans -- has become an everyday reality reshaping industries from software development to healthcare. The race to build the most capable systems has drawn billions in capital investment and brought newfound attention to the world's largest technology companies.
Among the frontrunners stand ChatGPT from OpenAI, Claude from Anthropic, Grok from xAI, and Perplexity's search-augmented models. These companies are backed by heavyweight investors: Microsoft has poured enormous resources into OpenAI, Amazon (AMZN 0.73%) and Alphabet (GOOGL 0.50%) (GOOG 0.29%) have each made substantial commitments to Anthropic, while xAI represents Elon Musk's ambitious push into the field of frontier AI.
The competition is fierce, the stakes are immense, and the questions on everyone's mind are simple yet electric: Which model is actually the best and on what basis should it be judged -- raw intelligence, reliability, speed, or something else? Elon Musk just offered his own pointed answer. And ironically enough, he didn't say Grok!
Image source: The White House.
Giving credit where credit is due In a recent post on X (formerly Twitter), Musk delivered a striking admission: He says he was wrong about Anthropic and now views the company as the clear current leader in AI. Musk went on to admit that no other lab has released a model that matches the quality of Anthropic's Mythos/Fable system.
While openly praising a competitor may seem counterintuitive, Musk has a history of lending support to rivals. As he made sure to remind his nearly 241 million X followers, Tesla open-sourced its patents and made its Supercharger network available to other electric vehicle (EV) developers.
Just about any public remark by Musk is influential. In this specific instance, it signals that even a competitor is willing to acknowledge superior performance when it appears, rather than dismissing it. In an AI landscape defined by rapid iteration and enormous capital outlays, such candor can easily influence talent flows and partnership decisions.
By highlighting his own history of enabling rivals, Musk appears aligned with the idea that competitive fair play is a choice rather than a weakness. More directly, he declares Anthropic's Mythos/Fable as the most capable model currently available.
Anthropic's success is great news for Amazon and Alphabet Anthropic's rise carries tangible upside for both Alphabet and Amazon, which have each made meaningful investments in the company. Beyond equity stakes, the relationship runs deeper through infrastructure.
Anthropic relies on custom silicon designed by both hyperscalers -- Amazon's Trainium and Inferentia chips for training and inference workloads, and Google Cloud's Tensor Processing Units (TPUs) for custom workloads. Moreover, Anthropic trains and runs its models across both Amazon Web Services (AWS) and Google Cloud Platform (GCP).
When an AI lab scales its models, it consumes incrementally more compute. This demand benefits the cloud providers supplying the underlying hardware and platform services. In other words, greater adoption of Trainium, Inferentia, and TPUs increases utilization of specialized capacity. This translates into higher cloud revenue and improved operating leverage for AWS and GCP.
Image source: The Motley Fool.
Why Amazon and Alphabet stock both have upside Amazon first invested in Anthropic in September 2023. Back then, AWS revenue was growing 13% year over year and the segment boasted an operating margin of 30%. Meanwhile, Alphabet initially invested in Anthropic in February 2023. Around this time, GCP was growing 28% annually and had just reached profitability. Today, AWS revenue is growing 28% year over year, and the operating margin has expanded to 38%. Sales from GCP are now accelerating 63% year over year while this division maintains operating margins in excess of 30%.
Today's Change
(
-0.50
%) $
-1.81
Current Price
$
357.08
Despite the visible acceleration in Amazon's and Alphabet's cloud revenues and the expansion of operating profit in those businesses, the compression in forward price-to-earnings (P/E) multiples for both Amazon and Alphabet suggests that the maximum upside from Anthropic is not yet fully reflected in their current stock prices.
GOOGL PE Ratio (Forward) data by YCharts
While current tailwinds from AI-related cloud demand are clearly contributing to results, smart investors realize that they largely capture today's workloads. Anthropic's next-generation models -- such as Mythos 2 -- will almost certainly require more compute than previous generations. This step-change in scale creates layered demand for custom silicon and cloud capacity throughout the AI infrastructure era.
While the accretive impact from Anthropic's existing integrations in AWS and GCP is already helping revenue growth and profit margins, the longer-term trajectory remains largely ahead as successive leaps in model capability and the resulting compute hunger manifest. For investors, this means the most substantial rewards from Anthropic's progress are still to come rather than already priced into Amazon and Alphabet.
Amazon (AMZN 0.73%) is reportedly exploring external sales of its custom AI chips, creating a potential new catalyst beyond AWS. If Trainium and Inferentia gain traction, Amazon could challenge Nvidia's pricing power while expanding its role in AI infrastructure. But execution risk, software ecosystems, and free cash flow pressure still matter.
Stock prices used were the market prices of July 1, 2026. The video was published on July 12, 2026.
Rick Orford has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy. Rick Orford is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link, they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
Amazon (AMZN 0.69%) is reported to have made a shocking decision in recent days. According to CNBC, it is issuing $25 billion in debt to fund its data center build-out. While it doesn't plan to issue any more debt beyond that in 2026, it's a big deal because Amazon's long-term debt has been soaring in the past few years.
Building data centers isn't cheap, and the cash has to come from somewhere, but is this the right move, or should it scare investors?
Image source: Getty Images.
The payoff could be immense In recent years, Amazon's debt load has skyrocketed from the company's historical levels.
AMZN Total Long Term Debt (Quarterly), data by YCharts.
The latest $25 billion sale of debt adds to this total, but Amazon has the cash flow to fund the repayment. The reality is that it's vital for the company to grab as much cloud infrastructure market share as possible in these early days of the AI build-out; it will be more difficult to win clients away from other cloud providers once everyone has their preferred vendor.
The company is currently leading the way among AI hyperscalers in data center construction plans, and it expects to lay out around $200 billion in capital expenditures this year. Over the past 12 months, Amazon generated just shy of $150 billion in cash from operations, so the gap between funds coming in and cash flowing out had to be closed somehow.
AMZN Cash from Operations (TTM), data by YCharts; TTM = trailing 12 months.
As a result, investors should not feel too blindsided by this debt issuance. But is it worth it?
CEO Andy Jassy said in his shareholder letter that the nature of a cloud computing business requires increased capital input when it's growing rapidly. Data centers aren't cheap to bring online, but they do have great payoffs over long time frames. Jassy also mentioned that a significant amount of the new computing capacity that $200 billion will buy is already under contract to customers, so it isn't just taking a leap of faith when building these data centers.
Once the construction is over and the company is benefiting from a much larger cloud computing footprint, its gains in revenue and cash flow will be immense, and should dwarf any concerns about its rising debt load. Current market conditions and demands dictate that management build more data centers, and that's exactly what it's doing.
With Amazon Web Services being a major part of the cloud computing landscape and an important part of the company's overall business, now is a perfect time to buy the stock, as Amazon's growth over the next few years could be immense.
The stocks of the big three cloud computing companies, Amazon (AMZN 0.73%), Microsoft (MSFT +0.15%), and Alphabet (GOOGL 0.48%) (GOOG 0.29%), have had mixed performances in 2026 thus far. Alphabet has led the way with about a 13% return, while Amazon is up nearly 7%, and Microsoft has fallen 20%.
All three companies are seeing strong cloud computing growth and are investing heavily in artificial intelligence (AI) infrastructure to capture the opportunity ahead of them.
Let's dig into each stock to see which is the best to buy right now.
Image source: Getty Images.
Amazon is the largest cloud provider by market share, having created the infrastructure-as-a-service concept more than 20 years ago with the launch of Amazon Web Services (AWS).
Today's Change
(
-0.73
%) $
-1.81
Current Price
$
245.23
While the company is best known for its e-commerce operations, AWS is actually its most profitable segment. While AWS revenue growth has trailed its two main competitors, it has started to accelerate, increasing 28% year over year in the first quarter. With partnerships in place with Anthropic and, more recently, OpenAI, that revenue-growth acceleration should continue this year.
The company also has a large custom-chip business, including both AI accelerators and central processing units (CPUs). This is an over $20 billion run-rate business or $50 billion when including internal use. It also helps give it a cost advantage by lowering inference costs.
Amazon's e-commerce business is also performing well and currently experiencing a lot of operating leverage due to its investments in robotics and AI. The stock currently trades at a forward price-to-earnings (P/E) ratio of under 25 times fiscal 2027 estimates.
Microsoft Microsoft's Azure cloud computing unit, a big growth driver for the enterprise software giant, has been growing its revenue by 30% or more for 11 straight quarters. This included last quarter, its fiscal Q3, when revenue soared 40% (39% in constant currencies).
Today's Change
(
0.15
%) $
0.58
Current Price
$
384.94
Revenue growth is driven by strong demand for compute and AI services, and Microsoft has consistently said demand continues to outstrip supply. Meanwhile, Microsoft has some huge future commitments from OpenAI, and to a lesser extent Anthropic, that should continue to fuel growth in the coming years.
Why the stock has struggled, though, is that it has been behind with its own tech. It has largely relied on OpenAI's AI models and is behind in developing custom AI chips, instead relying on pricier Nvidia graphics processing units (GPUs). And while Microsoft's core software business has been performing well, led by increasing adoption of its Copilot AI assistants, there remains an underlying fear in the market that AI will disrupt the software industry.
On its end, Microsoft is trying to catch up with its own tech, both with AI models and chips, and has started to replace some OpenAI models with its own internally developed ones. The stock currently trades at a forward P/E of 17 times fiscal 2027 analyst estimates, and it owns a 27% stake in OpenAI.
Alphabet Alphabet has the smallest cloud computing unit of the big three cloud providers, but the company also has some of the biggest advantages. It is the most complete AI player, with both a world-class foundational AI model in Gemini and top-notch AI chips with its tensor processing units (TPUs).
Today's Change
(
-0.48
%) $
-1.71
Current Price
$
357.18
Alphabet's TPUs were developed more than a decade ago and are generally considered best in class among custom AI chips, as the company has optimized its entire ecosystem around them. In fact, Anthropic has placed large orders for these chips, creating another nice high-margin revenue stream. These chips also allow Alphabet to train its models and run inference at a much lower cost than competitors that rely on Nvidia GPUs.
Overall, Google Cloud saw the strongest growth of the big three cloud providers, as revenue surged 63% last quarter. At the same time, Alphabet has incorporated its Gemini model throughout its entire product ecosystem, including Google Search, to help drive growth. Its global ad network then helps it monetize its commercial AI endeavors better than competitors.
The stock currently trades at 24 times 2027 analyst estimates, and it also has a significant opportunity outside of AI in its Waymo robotaxi business.
The verdict I think all three of the big three cloud computing providers look interesting at current levels. However, I prefer Amazon and Alphabet given their tech advantages over Microsoft.
If I could only pick one right now, I'd choose Amazon, as it trades at a significant discount to its retail peers despite the huge operating leverage it is seeing, which is driving strong profitability growth in its e-commerce segment. Meanwhile, its cloud business is seeing accelerating revenue growth, which could help the stock break out. That said, I personally own both Amazon and Alphabet and think they are great long-term stocks.
$2.6 trillion. That is what Amazon (NASDAQ:AMZN | AMZN Price Prediction) is worth as of July 2, 2026, sitting on 10.76 billion shares at a closing price of $242.67. The figure is a market cap, not a reported financial.
What makes this the number to watch is what is happening underneath the hood. Indeed, the parts of Amazon growing fastest are now the ones with the highest margins, and the empire built on retail is being repriced as an artificial intelligence infrastructure business.
What It Means Behind Amazon’s $2.6 trillion valuation is a Q1 2026 report that changed the growth math. Revenue landed at $181.52 billion, up 16.61% year over year. Earnings per share came in at $2.78 against a $1.653 estimate, a 68.18% beat and the fifth consecutive EPS beat. Investors should note that net income of $30.25 billion included $16.8 billion in pre-tax gains from Anthropic holdings, a non-recurring item. The cleaner read is operating income of $23.85 billion, up 29.6% year over year, with the corporate operating margin at 13.1%.
On the horizon, I think the real repricing catalyst is AWS. Cloud revenue reached $37.59 billion, growing 28%, the fastest pace in 15 quarters, at an operating margin of 37.7%. Amazon’s chips business (Graviton, Trainium, Nitro) crossed a $20 billion annual run rate at triple-digit year-over-year growth. Advertising services generated $17.24 billion in the quarter, up 24%, and now runs at a trailing rate above $70 billion. Unit growth in stores hit 15%, the highest reading since the end of COVID lockdowns.
Market Reaction Shares of AMZN stock are up 6.9% over the past week and 5.13% year to date, but down 5.4% over the past month. The stock closed at $259.67 the day the Q1 earnings report was filed on April 29, 2026, ran to $271.17 one week later, then cooled to today’s $242.67. Over one year the stock is up 10.34%, and over ten years it is up 568.81%.
Bull Case The bull case is that Amazon is being paid like a mature retailer while operating like a growth infrastructure company. At 32 trailing earnings and 31 forward earnings, the multiple sits alongside quarterly earnings growth of 74.8% and return on equity of 24.3%. Operating cash flow rose 52.99% year over year to $26.03 billion. International operating income grew 40% year over year, and North America’s operating margin expanded to 7.9% from 6.3%.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Amazon didn't make the cut. Grab the names FREE today.
The company’s AI backlog is the piece long-term holders should focus on. AWS has locked in roughly 2 gigawatts of Trainium capacity for OpenAI through 2027 and up to 5 gigawatts for Anthropic, with Meta also on the customer list. Amazon Bedrock processed more tokens in Q1 than in all prior years combined, and customer spend on Bedrock grew 170% quarter over quarter.
CEO Andy Jassy framed it plainly: “We’re in the middle of some of the biggest inflections of our lifetime, we’re well positioned to lead, and I’m very optimistic about what’s ahead for our customers and Amazon.”
Analyst positioning matches the setup. Of the analysts covering the name, 15 rate it Strong Buy, 47 Buy, 4 Hold, and none Sell, with a consensus target of $312.99.
Bottom Line The $2.61 trillion price tag is only heavy if AWS decelerates – right now it is doing the opposite. Amazon guided Q2 2026 revenue to $194 billion to $199 billion, or 16% to 19% growth, with operating income of $20 billion to $24 billion against a year-ago figure of $19.2 billion.
That guidance assumes Prime Day falls in Q2 2026. The near-term catalysts on the calendar (Prime Day, the Q2 earnings report, and the start of a 1 million-plus NVIDIA GPU deployment in 2026) will test whether the AI infrastructure narrative can pull the multiple higher. For retirement-focused holders, the question is whether the second-largest company in America is still compounding like a growth company at a $2.61 trillion market cap. This quarter says yes.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Amazon didn't make the cut. Grab the names FREE today.
On an early morning in January, Jake Linsley woke up to a text from Amazon that was lighting up his phone.
"I thought it was saying, 'Your package is delayed,'" Linsley said in an interview. "I read it again and was like, 'Holy s---, I got fired.'"
Linsley, who worked as a finance manager at Amazon for nearly six years, was one of roughly 16,000 employees swept up in the company's mass layoffs in late January. Combined with the more than 14,000 staffers let go three months earlier, it marked the steepest cuts in Amazon's history.
As an Amazon employee, Linsley was part of an American corporate elite: working for a tech giant with opportunities for growth, promotion, high salaries and enviable perks. But he and the other laid-off workers suddenly entered the harsh reality of a job market being rapidly reshaped by artificial intelligence — and competing with hordes of others who had been let go b Meta, Salesforce and Cisco. In some cases, the jobs they'd been hired to do simply don't exist anymore. And the tech giants continue to cut roles in part to fund the hundreds of billions of dollars they're investing in AI.
The tech sector has laid off roughly 140,000 employees in the U.S. so far this year, more than any other industry, according to consulting firm Challenger, Gray & Christmas. In May, layoffs across the industry reached their highest for any month since August 2024, before easing in June.
AI was the main reason companies gave for the cuts for a fourth straight month, Challenger said in a report last week. The firm said AI has been cited in about 23% of all job cut announcements in 2026.
"Tech remains the epicenter of this year's cuts," Challenger said. "AI is the dominant force as companies are restructuring around it, automating roles and reallocating budgets toward new capabilities. The sector is being reshaped in real time."
Amazon has been downsizing more aggressively than many of its peers, laying off more than 57,000 staffers since 2022, or roughly 16% of its corporate workforce. According to data from the website Layoffs.fyi, Amazon has accounted for about 13% of the tech industry's cuts this year.
Amazon CEO Andy Jassy has warned employees that AI "should change the way our work is done," and that in the next few years, efficiency gains from the technology "will reduce our total corporate workforce." The company has looked for ways to unwind its pandemic-era hiring binge and eliminate bureaucracy so that it can operate like "the world's largest startup."
CNBC spoke to more than a dozen people laid off by Amazon over the past eight-plus months about how they've navigated the job market at a time of swelling industry unemployment and, for many, a sense of diminishing opportunity.
While some have since landed roles at places like Apple or Salesforce, others are staring at hundreds of unanswered job applications and roles with pay cuts. Some described the dark irony of going all in on AI at Amazon only to find themselves replaced by it.
Montana MacLachlan, an Amazon spokesperson, said in a statement that the cuts were made to ensure the company can move fast and serve customers. Amazon continues to hire and invest in strategic areas that are critical to its future, she added.
"We don't make decisions to eliminate roles lightly, and we work hard to support employees who are impacted," MacLachlan said.
AI wasn't the reason for the vast majority of the layoffs, Amazon said.
Linsley's job search lasted for about three months, before he took a position in April as a vice president at a health-care IT startup.
"I'd rather have a stable job than one that can grow 5x and disappear overnight," he said.
The job huntCourtney Haeflinger applied to hundreds of jobs but struggled to land interviews.
For months after she was laid off from Amazon Web Services in January, she'd begin her day in front of her computer at 8:30 a.m., diligently scanning job boards and refreshing her inbox, hoping to hear back from recruiters.
As soon as a job was posted, there would quickly be 200 to 300 applicants, Haeflinger said. She couldn't tell if it was due to the raft of unemployed workers, or if bots were running wild.
"It makes it harder for us as real job seekers to get in the door," said Haeflinger, 49, who landed a job last week at AT&T. "It's frustrating."
In the months after her departure from Amazon, the pace of cuts across the industry turned a difficult task into a seeming impossibility.
Haeflinger applied for a few jobs at Meta, around the time the company was announcing plans to eliminate 10% of its staff. A job at Oracle came across her feed. But when she saw the software vendor was cutting thousands of jobs, she hesitated to apply.
watch now
Amazon, meanwhile, has continued to downsize through smaller rounds, slashing roles in customer service in April, followed by cuts in the third-party seller support division in May, according to people familiar with the matter who asked not to be named because the layoffs weren't made public.
The company laid off 57 employees in its home state of Washington between May and early June, according to a WARN filing released Monday. The filing doesn't indicate what units were impacted, but software engineers, program managers and product roles were among the job titles listed.
Dorian Smith was only out of work for about a month after getting laid off by Amazon in January, but he said it was a humbling experience that drove him to take a job at a late-stage startup.
Smith said he'd thought of Amazon as a "lifelong career," having worked his way up in customer service to a job as a web development engineer over his 10-plus years at the company.
"It was almost heartbreaking in a way because my identity felt tied to that job," Smith said.
He applied to at least 250 jobs and only heard back from four companies, all with "generic rejection emails," Smith said. He ultimately connected with a recruiter after posting on LinkedIn, which led him to the startup world.
"I always had this thought of, 'I have Amazon on my resume, this prestigious thing,'" Smith said. "But when this layoff happened, it was like, 'OK, big deal, so do 30,000 other people.'"
'New era' of softwareFor some former Amazon workers, the layoffs provided an opportunity to reset.
Yogesh Verma, a former AWS engineer who lost his job in January, called it a "blessing in disguise." The 25-year-old said he soured on Amazon as it enacted a strict return-to-office policy, pressure around AI usage grew and employees were tasked with "building new products haphazardly."
"Initially, it felt like, 'Oh, what am I going to do now,' but it gradually turned out for the better," Verma said. "The workload was getting higher and higher, and the work-life balance was also getting worse."
In April, Verma took a slight pay cut to join an AI marketing company that he said offers a "good environment," hybrid work options and an opportunity to learn new skills.
A former director in Amazon's advertising unit who was laid off in October — and who wished to remain anonymous in order to not jeopardize his job search — said working for a big tech company was a "life changer," but that the job had become a drain on his mental and physical health.
He said he's taking time off to strengthen his AI coding skills, so that when he reenters the job market, he's better equipped for "software development in this new era."
Chris DeSantis, who worked as a senior product manager for nearly four years, said he's "happy to take less money" if it means he can work for a company that's closer to the cutting edge of AI. DeSantis, 32, was laid off from Amazon's retail organization in January.
"When you look at these companies and what they're doing with AI, people like us, engineers and technical product managers, we want to be doing the fun stuff, building things super fast," DeSantis said. "It used to be that going to the bigger companies was that, but now, at least based on the organization I was in, we weren't close to doing the fun stuff."
Whether it's fun or not, AI has taken over the halls of Amazon.
Jassy, who replaced founder Jeff Bezos as CEO in 2021, has urged employees to "use and experiment with AI whenever you can," and figure out ways to "get more done with scrappier teams."
AWS has released a slew of AI tools mostly targeted for enterprises, while also striving to develop more competitive AI models and putting Amazon at the center of the surge in demand for AI compute. The company has infused AI across more surfaces of its e-commerce website, including the search bar, and has revamped its aging Alexa digital assistant with more conversational and agentic features.
'Rat race'While the AI blitz is viewed as essential to keep Amazon relevant in the next era of technology, life at the company now resembles a "rat race," in the words of a current software engineer, who asked not to be named in order to speak candidly on the subject.
Some Amazon managers track employees' AI activity via internal dashboards, and are instructed by leaders to remind their teams to adopt the tools as much as possible, with certain teams factoring usage into performance reviews, three current and former employees said.
A former AWS engineer who was laid off in January and also asked to remain unnamed said it had become "abundantly clear that the priority was AI everywhere, regardless of whether it really helped or made sense."
At the same time, Amazon and other companies are reckoning with the high costs of AI and have taken steps to rein in so-called tokenmaxxing, where developers use AI as much as possible with little regard to output.
Another former engineer at AWS said Amazon added badges to its internal "phone tool" directory that scored employees' usage of its AI apps called Q, based on the number of tokens they consumed.
In late May, Amazon shut down a similar phone tool leaderboard, called Kirorank, after it discovered employees were tokenmaxxing to climb up the ranks.
As it slashes its corporate workforce, Amazon has ramped up its hiring in lower-cost countries like India, according to three former employees who described that dynamic in the organizations where they worked. One of those people — a former manager who was laid off in May — called it a "no-brainer," as the company knows that, compared to Seattle, it can hire people in India at a "fraction of the cost."
DeSantis, the laid-off product manager, said he adopted a "survivalist mentality" after making it through six rounds of job cuts during his time at Amazon. When his time finally came, DeSantis said he did his best not to take it personally.
"It really is kind of bizarre when it does happen to you," DeSantis said. "When you look back, it's like there's nothing you could've done."
In a year when the artificial intelligence (AI) trade minted fortunes across chipmakers and power suppliers, one of the companies best positioned to profit from AI at scale has been left behind. Amazon (AMZN 0.73%) has been one of the megacap laggards of 2026, up only modestly while the AI names raced higher around it.
What makes that odd is that Amazon's business is arguably in its best shape in years. The stock even drew fresh attention recently when a well-known hedge fund manager was reported to have trimmed his position, adding to a sense that the market has cooled on it.
So, with the stock sitting about 12% below its 52-week high, is Amazon a bargain hiding in plain sight? Or is the market right to hesitate?
Image source: Getty Images.
The business is quietly setting records The place to look first is the cloud. Amazon Web Services, the company's most important profit engine, just reaccelerated. AWS revenue rose 28% year over year to $37.6 billion in the first quarter of 2026. That was its fastest growth in 15 quarters, and it puts the business at about a $150 billion annual pace.
A good chunk of that reacceleration is AI itself. Companies increasingly train and run their models where their data already sits, and for many of them that means AWS.
The growth is also enormously profitable. AWS generated $14.2 billion in operating income at a 37.7% margin, which is why it drives most of Amazon's profits even though it is a fraction of total revenue.
The rest of the company pulled its weight, too. Total revenue rose 17% to $181.5 billion, and operating income jumped to $23.9 billion. That worked out to an operating margin of 13.1%, a record for Amazon and a sign that years of cost discipline in retail are finally showing up.
By segment, North America revenue rose 12% to $104 billion, and the international business grew 19%, both turning a solid profit. Advertising, a high-margin business tucked inside retail, keeps growing at a double-digit clip and quietly pads those margins.
Amazon is even building a substantial AI chip business. Its custom silicon now runs at more than a $20 billion annual revenue pace and is growing at triple-digit rates, as customers hunt for cheaper alternatives to the priciest graphics processing units (GPUs).
Today's Change
(
-0.73
%) $
-1.81
Current Price
$
245.23
What's holding the stock back So why hasn't the stock followed? The short answer is spending. Amazon poured $44.2 billion into capital projects in the first quarter alone, most of it for AI infrastructure, up from $25 billion a year earlier.
That surge has all but erased the company's free cash flow, which fell to about $1.2 billion over the trailing 12 months, down from nearly $26 billion.
That is the figure that worries investors. A company famous for generating cash is suddenly generating almost none. The bet is that today's spending builds the data centers that power tomorrow's AWS growth. But that payoff takes years, and the timing is never guaranteed.
Still, I think the trade-off looks reasonable. The spending is a choice, not a symptom of a struggling business. AWS is reaccelerating, retail margins are improving, and the chip business gives Amazon a second way to profit from AI.
Amazon has made this kind of bet before, too. It spent heavily to build AWS and its logistics network years ago, and both turned into enormous profit engines once the investment cycle passed.
And the price is fair. At about $244 as of this writing, Amazon trades at roughly 29 times earnings. That isn't the bargain-bin multiple its underperformance might suggest, but it's a reasonable price for a business growing profits at this rate, and a discount to where the stock has often traded in the past.
So is Amazon a bargain? Not a screaming one. But I think it's good value here, and the setup is appealing: a market-leading business performing well on several fronts, temporarily out of favor because it is investing heavily for the future.
Personally, I'd be comfortable buying on this weakness. I'd just go in knowing that the heavy spending, and the pressure it puts on free cash flow, is likely to continue for a while. For patient investors, the laggard may turn out to be the opportunity.
