Amazon (NASDAQ: AMZN) has emerged as one of the most talked-about tech stocks on Wall Street, not only due to its dominant position in e-commerce and cloud computing, but also for its growing influence in the artificial intelligence (AI) space. Despite a strong rally in early 2023, Amazon stock is still trading below $150—making it an appealing opportunity for long-term investors.
In this article, InfoFinance explores why Amazon stock is considered a compelling investment at the intersection of technology and innovation.
In Q3 2023, Amazon released an impressive earnings report that beat Wall Street expectations. The company posted robust performance across its key segments, particularly e-commerce and Amazon Web Services (AWS). Notably, free cash flow reached $21 billion in the trailing 12 months—tripling from the previous period.
Despite these improvements, Amazon’s stock price doesn’t seem to reflect its financial strength. Its price-to-free-cash-flow (P/FCF) ratio is hovering near decade-low levels, suggesting that the market may be underestimating the company’s long-term potential.
While Amazon may not have made as many AI headlines as Microsoft or Google, the company is methodically building its AI footprint through a multibillion-dollar investment in AI startup Anthropic.
Through this partnership, Anthropic will use AWS as its primary cloud provider and leverage Amazon’s proprietary AI chips—Trainium and Inferentia—to train next-generation models. This positions AWS as a central player in the AI infrastructure space and strengthens its competitive edge against Azure and Google Cloud Platform.
CEO Andy Jassy emphasized during the earnings call that AWS is entering a new phase of growth, driven largely by generative AI and the accelerating shift from on-premise infrastructure to the cloud.
In June 2022, Amazon executed a 20-for-1 stock split—its first since 1999. The move significantly lowered the per-share price and made it more accessible to retail investors. Today, the stock trades around $143 per share, making it easier for new investors to buy in without needing to commit a large amount of capital.
The split has also improved liquidity and broadened Amazon’s appeal to a wider base of individual investors.
After reporting negative free cash flow throughout 2022 due to macroeconomic challenges, Amazon has turned the corner. As of Q3 2023, the company reported $21 billion in trailing 12-month free cash flow—its first positive figure in over a year.
This turnaround highlights Amazon’s operational efficiency and ability to generate cash even in a turbulent economic environment. More importantly, it strengthens the company’s capacity to reinvest, repurchase shares, or pay potential dividends in the future.
Despite a 70% rally since the beginning of the year, many analysts still believe that Amazon stock is undervalued. AWS remains a key driver, and the company's AI roadmap adds an entirely new layer of growth opportunity.
Wall Street analysts have projected that Amazon could reach a $2 trillion market capitalization within the next decade—a potential doubling from current levels.
For investors looking to ride the next wave of technological innovation, Amazon remains a cornerstone equity with strong upside potential.
Beyond e-commerce and cloud computing, Amazon operates a diversified business ecosystem including logistics, digital entertainment, advertising, and now AI. This diversification helps the company maintain stability across various economic cycles.
Its multifaceted operations also provide multiple revenue streams, reducing reliance on any single business unit and increasing overall resilience.
As AI continues to redefine the global tech landscape, Amazon offers a rare blend of growth, value, and innovation. With its improving financials, strategic AI investments, and industry-leading cloud platform, AMZN is well-positioned to benefit from long-term trends in digital transformation.
For investors seeking exposure to the AI revolution with a trusted name in tech, Amazon stock at its current price could be one of the best opportunities available today.
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