Is Amazon.com, Inc. (AMZN) A Good Stock To Buy Now?

Is AMZN a good stock to buy? We came across a bullish thesis on Amazon.com, Inc. on Level-Headed Investing’s Substack by Bernardo. In this article, we will summarize the bulls’ thesis on AMZN. Amazon.com, Inc.’s share was trading at $249.91 as of April 21st. AMZN’s trailing and forward P/E were 34.85 and 30.77 respectively according to Yahoo Finance.

Amazon.com, Inc. engages in the retail sale of consumer products, advertising, and subscriptions service through online and physical stores in North America and internationally. AMZN delivered a strong Q4 2025 with double-digit revenue growth, accelerating AWS expansion, and higher operating income, but sentiment was driven lower by a $200 billion 2026 CapEx plan, triggering an ~11% after-hours decline as investors focused on AI infrastructure intensity.

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Despite this, fundamentals remained solid, with revenue of $213.4 billion (+14% YoY) and operating income of $25 billion, or $27.4 billion adjusted for one-offs, reflecting healthy margin expansion. Advertising grew 23% YoY and third-party seller services rose 11% YoY, reinforcing a higher-margin mix shift.

AWS remained the core profit engine, growing 24% YoY to $35.6 billion and reaching a $142 billion annualized run-rate, while sustaining ~35% margins. AWS continues to generate the majority of operating income despite being a minority of revenue, underscoring its role in funding Amazon’s heavy reinvestment cycle. Management highlighted strong demand visibility supported by a $244 billion backlog, up 40% YoY, reinforcing multi-year durability.

For FY2025, Amazon generated $716.9 billion in revenue (+12% YoY) and $139.5 billion in operating cash flow (+20% YoY), though free cash flow declined due to elevated AI-related CapEx. Segment trends remained positive, with improving North America retail margins, steady international progress, and rising advertising contribution enhancing ecosystem profitability.

The $200 billion CapEx plan reflects an intentional acceleration into AI infrastructure, chips, and data centers, with Trainium and Graviton improving AWS efficiency and competitiveness. While near-term depreciation and cash flow pressure will persist, Amazon’s $123 billion liquidity and strong cash generation provide flexibility.

At ~15x P/OCF, near decade lows, valuation appears to price peak uncertainty rather than peak earnings power. If AWS growth, backlog expansion, and AI monetization remain intact, Amazon is positioned for durable compounding, with this investment cycle likely translating into long-term operating leverage and significant upside.

Previously, we covered a bullish thesis on Amazon.com, Inc. (AMZN) by FluentInQuality in May 2025, which highlighted AWS dominance, advertising growth, and Amazon’s diversified flywheel across retail, cloud, and subscriptions. AMZN’s stock price has appreciated by approximately 19.78% since our coverage. Bernardo shares a similar view but emphasizes Q4 2025 results and the $200 billion CapEx-led AI infrastructure expansion as the key differentiator.

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.