Key Points
Amazon (NASDAQ: AMZN) reported a 5% stock rise for the previous year, underperforming the S&P 500’s 18% gain. This comes ahead of its fourth-quarter report set for next week, which is expected to reflect strong holiday e-commerce performance. According to preliminary Visa data, holiday spending rose 4.2% year-over-year, with e-commerce sales up 7.8%. Amazon commands approximately 40% of U.S. e-commerce, indicating potential positive outcomes in its upcoming earnings announcement.
In its Amazon Web Services (AWS) segment, the company noted a 20% year-over-year sales increase in Q3 2025. AWS holds a 29% market share, and investment in AI capabilities reached $125 billion in 2025, with plans to increase this in 2026. CEO Andy Jassy anticipates significant growth as clients migrate to cloud-based AI tools.
Currently, Amazon’s stock trades at a P/E ratio of 33, perceived as fairly valued or potentially undervalued given the company’s market position. Despite mixed investor sentiment towards its AI initiatives, analysts recommend considering Amazon as a long-term investment opportunity.
