Is AMZN a good stock to buy? We came across a bullish thesis on Amazon.com, Inc. on Investomine’s Substack. In this article, we will summarize the bulls’ thesis on AMZN. Amazon.com, Inc.’s share was trading at $ 213.49 as of March 9th. AMZN’s trailing and forward P/E were 29.74 and 26.25, respectively according to Yahoo Finance.
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Amazon.com, Inc. engages in the retail sale of consumer products, advertising, and subscription services through online and physical stores in North America and internationally. AMZN closed 2025 with a powerful quarter, demonstrating broad-based growth, margin expansion, and a clear reacceleration at Amazon Web Services (AWS), the company’s key profit engine. Q4 net sales reached $213.4 billion, up 14% year-over-year, while operating income increased 18% to $25.0 billion, reflecting efficiency gains from the company’s multi-year reset.
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AWS led the way, delivering $35.6 billion in revenue (+24% YoY) and operating income of $12.5 billion, with 35% margins, driven by surging enterprise demand and adoption of custom AI chips like Trainium and Graviton, now with run-rates exceeding $10 billion. North America revenue grew 10% to $127.1 billion with record 9% operating margins, benefiting from improved fulfillment, ultra-fast delivery, and a higher third-party seller mix.
International revenue rose 17% to $50.7 billion, though margin pressure persists due to aggressive pricing, same-day delivery, and quick commerce expansion. High-margin advertising and subscription services also contributed meaningfully, with advertising revenue reaching $21.3 billion (+23% YoY), rivaling AWS growth while requiring minimal capital. For the full year, Amazon posted $716.9 billion in sales, $80 billion in operating income, and $77.7 billion in net income, with a record operating cash flow of $139.5 billion.
Free cash flow, however, dropped to $11.2 billion due to $128.3 billion in AI-related CapEx, which is expected to surge toward $200 billion in 2026 for AI infrastructure, custom silicon, robotics, and Project Kuiper. Despite this near-term cash compression, Amazon retains a strong balance sheet, $123 billion in cash, and a strategic focus on long-term returns. Investors are positioned for substantial upside driven by AWS scale, AI monetization, and advertising margins, though near-term volatility is likely due to elevated capital intensity.
Previously, we covered a bullish thesis on Amazon.com, Inc. (AMZN) by FluentInQuality in May 2025, highlighting AWS growth, a strong logistics network, high-margin advertising, and interlinked franchises driving an economic flywheel. AMZN’s stock price has appreciated by approximately 2.32% since our coverage. Investomine shares a similar view but emphasizes Q4 and full-year 2025 results, AWS reacceleration, and near-term free cash flow compression from AI CapEx.
Amazon.com, Inc. is on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 381 hedge fund portfolios held AMZN at the end of the fourth quarter which was 332 in the previous quarter. While we acknowledge the risk and potential of AMZN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AMZN and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
