Why Amazon Stock Is a Smart Buy

Yes, Amazon’s e-commerce growth has slowed, and the stock lagged the S&P 500 for years. But since 2022, its share price has more than doubled. That rebound is driven by steady expansion in high margin businesses like cloud services, advertising, and now robotics.

Amazon’s Robotics Could, AWS and AI Data Centers

Amazon's core online retail business isn't thriving like it used to. In Q1, total sales rose just 9% year over year. But what really matters is where Amazon is growing faster and more profitably.

Advertising is one of those areas. As billions visit Amazon.com, the company has turned this traffic into a money machine. Ad revenue grew 19% last quarter, generating over $58 billion in the last year alone.

Then there's Amazon Web Services (AWS), which leads the cloud computing market. AWS made $111.8 billion over the last 12 months, growing 17% year over year. It’s also at the center of Amazon’s AI push, helping companies build AI tools using Amazon’s custom chips and infrastructure.

This shift toward high margin revenue sources is an increase in profits. In fact, Amazon’s earnings increased by 62% last quarter.

Amazon’s Robotics Could

Robots are already reshaping Amazon’s warehouses. Since 2012, Amazon has added over 750,000 robots to its fulfillment centers. These machines handle everything from picking to packing, cutting costs and speeding up delivery.

The company is now testing more advanced robots. Some, like the Vulcan, can handle items delicately. Others are humanoid style machines that can walk and use synthetic hands. This tech, if widely adopted, could transform Amazon’s logistics and dramatically improve efficiency.

Amazon recently launched a new robotics heavy fulfillment center in Shreveport, Louisiana. Early results are - faster processing, lower costs, and higher output.

Amazon AI Data Centers

Amazon is still investing heavily, especially in AI data centers and infrastructure. That can lead to uneven profits from quarter to quarter. But most analysts agree on the bigger picture: steady earnings growth. Right now, forecasts point to 16% annual earnings growth over the next several years.

Bottom Line on Amazon

Despite recent gains, Amazon’s valuation remains within its historical range. It trades well below past peak levels, suggesting the market may be underestimating its potential, especially in AI and robotics.

Amazon combines scale, strong brand recognition, and growth in profitable sectors. With a rising earnings profile and new technologies improving margins, this stock still looks like a good long term investment.