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$AMZN Stock Analysis.
When people value Amazon, I think too many stop at e-commerce.
That's where I think they're missing the bigger picture.
To me, Amazon is becoming an AI and infrastructure company that also happens to run one of the world's largest retailers.
Just look at the numbers.
In Q1 2026, Amazon generated $181.5B in revenue, up 17% year over year, while AWS grew 28% to $37.6B, its fastest growth rate in well over three years. Operating income reached $23.9B, showing the business is becoming more profitable even while investing aggressively.
The part that excites me most isn't what AWS is today...
It's what it could become.
Management says AWS's AI business is already running at an annual revenue rate of more than $15B, and demand for AI infrastructure still exceeds available capacity. That's why Amazon continues spending tens of billions on new data centres, custom silicon and networking.
Then there's Anthropic.
Amazon has already invested billions and recently expanded that commitment by another $5B, with the potential to invest up to $20B more tied to commercial milestones. At the same time, Anthropic has committed to buying massive amounts of AWS capacity. That's a relationship that could strengthen AWS for years.
Most people see those investments as expenses.
I see them as Amazon trying to secure its position before AI demand reaches another level.
Could that pressure free cash flow in the short term?
Absolutely.
But Amazon has always been willing to sacrifice near-term profits to build businesses that dominate for the next decade. It did it with logistics. It did it with AWS.
Now it's doing it with AI.
I'm not expecting Amazon to double overnight.
But if AWS continues compounding at these growth rates, advertising keeps expanding, AI services become a larger part of AWS, and its infrastructure investments begin to earn attractive returns, I think the company could be worth significantly more in a few years than it is today.
For me, Amazon isn't just another Magnificent Seven stock.
It's one of the few companies with the balance sheet, customer base and infrastructure to help define the next phase of AI.