The Amazon Paradox: Why Wall Street's Forgotten Giant Might Be Your Best AI Bet

Stock Price: $215 per share (as of today)
Market Value: About $2.3 trillion (yes, trillion with a T!)
What They Do: Run the world's biggest online store AND the world's biggest cloud computing business

Before we dive in, here's something that might surprise you: Amazon – yes, the company that probably delivered a package to your door this week and hosts half the internet – has become the worst performer among the "Magnificent 7" tech giants over the past six months.

In fact, Amazon stock is down 2% this year while its tech friends like Microsoft and Google have jumped 20-30%. Apple and Tesla are also struggling, but everyone else? They're partying.

But here's where our story gets really interesting: Many smart investors think this is actually a golden opportunity.

Right now, there's a massive argument happening on Wall Street. Some very smart people think Amazon is in trouble. Other equally smart people think everyone is missing an obvious opportunity. Let's hear from both sides.

Bernard Zambonin from Seeking Alpha (he has 1,290 followers who trust his analysis) is worried about Amazon. Here's what concerns him:

The AWS Problem:
AWS (Amazon Web Services – that's their cloud computing business) is only growing at 17% per year. Now, 17% sounds good, right? But Wall Street expected 20%+. And here's the kicker: Microsoft's Azure is growing at 26-33%, and Google Cloud is growing at 28-32%.

Bernard explains it like this: Imagine you're the champion runner, but suddenly your competitors are running faster than you. Are you getting slower, or are they just getting better?

His theory: Businesses are choosing Microsoft and Google for AI work because they offer "ready-to-use" AI tools, while Amazon makes you build things yourself. It's like the difference between buying a complete LEGO set versus buying loose bricks and figuring it out yourself.

The Money Drain:
Amazon is spending over $100 billion this year building AI data centers. That's more than the entire GDP of some countries! Because of this massive spending, the company's free cash flow has dropped 66%.

Bernard suggests a cautious "bull call spread" options strategy – basically a way to bet on modest gains while protecting yourself from losses.

The StockInvest.us Warning:
One automated system that analyzes stocks has actually rated Amazon a SELL since October 15th, giving it a score of -2.05. The system thinks Amazon will be weak for the next few days or weeks.

The Alpha Analyst (with 1,960 followers) agrees there's no clear reason to jump in right now. He gave Amazon a HOLD rating back in July and says he got the timing "perfectly" – the stock dropped 3% while the S&P 500 gained 6%.

His main point? "There's no exciting news coming."

He expects Amazon to keep trading between $200-$250 (basically going nowhere) until something big happens. His advice? Use an income strategy – sell options to collect cash while you wait.

He does warn: If AWS suddenly shows 20%+ growth or if advertising keeps booming, the stock could jump 20% quickly. But right now? He's not seeing it.

Now let's hear from the optimists. And boy, do they have a different story.

James Foord (a respected analyst with 22,290 followers and leader of "The Pragmatic Investor" group) is fired up about Amazon. He literally titled his analysis: "Don't Discount The Seemingly Forgotten #1 Hyperscaler."

His main argument? Everyone's forgotten that Amazon is STILL the king.

Here are his key points:

AWS is Still Dominating:
Yes, AWS is growing at "only" 17%. But here's what the bears miss: AWS has annual revenues of $123.6 billion. That's almost as much as Microsoft Azure ($75+ billion) and Google Cloud ($40.5 billion) combined!

James explains it like this: "When you're already the biggest, growing at 17% on a massive base is actually incredible. It's like saying a 300-pound football player gained 'only' 50 pounds of muscle – that's still impressive!"

The Real Reason for "Slow" Growth:
CEO Andy Jassy said something crucial that the bears ignore: "We have more demand than we can supply."

Translation: Amazon's problem isn't that customers don't want AWS. It's that they literally can't build data centers fast enough! They're being held back by capacity constraints (not enough buildings, not enough power).

James writes: "That's not a demand problem; that's a good problem to have."

Kennedy Njagi (with 1,120 followers and focused on AI infrastructure) dives deep into Amazon's secret weapon: their custom AI chips called Trainium 2.

Here's why this matters:

Most companies rent Nvidia GPUs (the expensive graphics chips that power AI) from cloud providers. But Amazon built their own chips that are 30-40% cheaper!

Kennedy reports that Anthropic (the company that makes Claude AI – a ChatGPT competitor) is now training their newest AI models on Amazon's Trainium 2 chips. This is huge because:

Kennedy rates Amazon a BUY, saying: "Amazon is AI-enabled, not AI-dependent."

What does that mean? Simple: If the AI hype suddenly dies tomorrow, Amazon still has:

That's a safety net Microsoft and Google don't have.

Michael Fitzsimmons (a very popular analyst with 22,290 followers) is even more bullish. He gives Amazon a BUY rating and thinks it could hit $325 by the end of 2027 – that's 48% higher than today's price!

His key insight: "Amazon is cash-rich and everyone's forgotten about it."

The numbers he points to:

Michael also highlights something nobody's talking about: the falling U.S. dollar.

Amazon makes about $150 billion in sales outside America (in Europe, Asia, etc.). When the dollar falls (which it has by 10% this year), that foreign money converts into more dollars when it comes back home. It's like getting a bonus just from currency exchange!

PropNotes (with 9,380 followers, specializing in income strategies) has a really creative take. They rate it a BUY but with a twist.

Their strategy: Sell "put options" at $200 per share that expire in April 2026.

Let me explain this in simple terms:

You're basically making a deal with someone: "I'll buy Amazon at $200 if it drops that low by April, and you pay me $10 per share right now for making this promise."

The beauty of this deal:

Scenario 1 – Amazon stays above $200:
You keep the $10 per share (that's a 10% return on your money in 6 months – way better than a savings account!), and you don't have to buy anything.

Scenario 2 – Amazon drops below $200:
You have to buy it, but your actual cost is $190 per share (because you got paid $10). That's 12% cheaper than today's price of $215!

PropNotes explains: "It's a win-win. Either you get paid great income, or you get to buy a great company at a discount."

Let's look at what the professional analysts think Amazon should be worth:

The Price Target Spectrum:

Average Wall Street target: $266 (that's 24% higher than today)

Several analysts pointed out factors that most people are completely missing:

Dividend Talks reports that Amazon's advertising business grew 22% last quarter and has profit margins around 40-50%.

To put that in perspective: Amazon generated $55 billion in advertising revenue last year. That's like running a whole second Facebook, except it's built into your shopping experience!

Every time you search for "running shoes" on Amazon and see sponsored results? That's the advertising business. And it's growing faster than almost anything else at the company.

62% of products sold on Amazon now come from third-party sellers (small businesses using Amazon's platform). This is basically free money for Amazon – they provide the platform and take a cut, without having to buy or store any inventory.

Unrivaled Investing (Daniel) notes this is approaching an all-time high and is "almost pure margin business."

Value Investing with Sven Carlin, Ph.D. points out that Amazon's international business just turned massively profitable – operating income up 448% in one year!

Think about it: Amazon is still in the early stages of building out fulfillment centers in India, Brazil, and other emerging markets. These are basically "blank spaces" where they face less competition than in the US.

Dividend Talks reports that Bank of America believes Amazon's robotics (they deployed their 1 millionth robot in July) will lead to "substantial material savings."

More robots = fewer labor costs = faster deliveries = higher profits. And Amazon is ahead of everyone else here.

Here's something worth noting: MacKenzie Scott (Jeff Bezos's ex-wife) has been selling Amazon stock – about 42% of her stake, worth over $12 billion.

Should this worry you?

Both Dividend Talks and Unrivaled Investing (Daniel) mention this but note that MacKenzie is one of the world's most active philanthropists. She might be selling to give money away, not because she thinks Amazon is in trouble.

Meanwhile, Wall Street Lunch reports that Amazon is laying off about 15% of its HR department while simultaneously spending $100+ billion on AI infrastructure.

The message? They're getting more efficient in some areas to invest heavily in the future.

James Foord, Michael Fitzsimmons, and Kennedy Njagi all say: Current prices ($215) are reasonable for long-term holders.

Their case:

Unrivaled Investing (Daniel) even suggests Amazon could deliver 100-200% returns over the next 5 years if everything goes right (that's doubling or tripling your money).

Start building a position now, but maybe spread your purchases over a few months in case there's a dip.

Bernard Zambonin and The Alpha Analyst both say: Wait for the October 28th earnings report.

Watch for these key numbers:

If AWS shows strong acceleration, the stock could quickly jump to $240-250.
If AWS disappoints again, the stock could fall to $200.

The earnings report is your signal to either jump in or stay away.

Amazon is like a marathon runner who's slowed down to tie their shoe.

Everyone's freaking out that the runner is going slower, but they're actually just preparing for the next leg of the race. The heavy AI infrastructure spending is that "shoe-tying moment" – necessary, but temporary.

The best approach depends on YOUR situation:

If you're already a shareholder: Hold tight. The fundamentals are solid, and the 3-5 year outlook is strong. James Foord and Michael Fitzsimmons both see the stock at $325+ by 2027.

If you're thinking of buying: You have three good options:

If you're a trader: Wait for the earnings report. That's your make-or-break moment.

Unrivaled Investing (Daniel) summed it up perfectly:

"Amazon is arguably undervalued. I like the current asymmetry."

What does that mean? Simple: The potential upside (growing profits, expanding margins, AI payoff) is much bigger than the potential downside (they're still the market leader with tons of cash).

Sometimes the best investments are the boring, obvious ones that everyone's stopped paying attention to.

Amazon might just be one of those.

This Finance newsletter is for informational purposes only and does not constitute investment advice. All analyst opinions are attributed to their original sources. Always do your own research and consult with a financial advisor before making investment decisions.

What do you think? Is Amazon being unfairly overlooked, or is the slow growth a warning sign? Hit reply and share your thoughts!

P.S. Remember, the October 28th earnings call will be crucial.