Tech stocks are back on the rise after a slump last week, and Amazon is leading the way.
I keep buying Amazon every time the bears hand me a headline like the falling $47.66 average Prime Day order, and I am not stopping now.
Amazon (AMZN) is finally upgraded to Strong Buy, as I saw a highly compelling entry point after recent underperformance and a pullback below $245. AMZN's aggressive CapEx and cloud capacity buildout position it to dominate AI infrastructure and monetize the higher-margin token-as-a-service layer. Despite near-term negative free cash flow margins projected through FY2026, analysts expect a positive inflection in 2027 and margin recovery toward 8% by FY2028. Not expected to be permanent.
Artificial intelligence has moved beyond proving it works.
Amazon might have seen a sharp correction in the past month, but I believe it's due for an uptick now even as some risks persist. With the macroeconomic situation easing, consumer confidence can improve and inflation can subside, stoking further growth for its big e-commerce segment and sustaining improved margins. After a strong Q1 2026 and the company's positive outlook for Q2 2026, my estimates for 2026 have been upgraded, with net income projections indicating attractive forward multiples.
Amazon has declined over 17% from all-time highs, but this is consistent with its historical rally cycles and not alarming. Q1 2026 results showed strong fundamentals: $181.5B revenue (+17% YoY), EPS of $2.78 (vs. $1.64 consensus), and a record 13.1% operating margin. Concerns over FCF erosion stem from massive $200B FY2026 CapEx, but these investments support long-lived AWS assets and future growth.
This article was written by Doug Nathman, with research by his team at Trefis.
In the most recent trading session, Amazon (AMZN) closed at $227.01, indicating a -3.1% shift from the previous trading day.
Many of your Prime Day orders are being handled by Roomba-esque bots as part of Amazon's quest to deliver packages faster.
It defies what most in the music biz have believed until now: Spotify pays itself more than what it pays to the record labels, according to a streaming royalty calculator launched by leading law firm Manatt Phelps & Phillips.
AMZN boosts its India commitment to $48B by 2030, expanding AI, cloud and logistics infrastructure as rivals race for the same growth market.
Mid-year is when serious investors stop trading the headlines and start thinking about the next decade.