Cathie Wood and Warren Buffett Both Own This Artificial Intelligence (AI) Stock. Time to Buy?

Core Insights - Both Cathie Wood and Warren Buffett hold shares in Amazon, indicating a rare alignment between the two investors [1][2] - Amazon is perceived as a strong contender in the AI space, trading at a discount compared to peers like Microsoft [4][14] Company Performance - Amazon reported Q3 2025 results with total revenue of $180.2 billion, a 13% increase from Q3 2024's $158.9 billion [5][6] - Earnings for Q3 2025 reached $21.2 billion, up 38.6% from $15.3 billion in Q3 2024, largely due to a $9.5 billion gain from an investment in AI startup Anthropic [6] - The North American segment's operating income declined due to a $2.5 billion legal settlement, but would have increased by 28% without this charge [7] Segment Analysis - Revenue growth for Amazon's segments in Q3 2025: North America at 11%, international at 14%, and AWS at 20% [5] - The international segment's operating income decline was influenced by recent layoffs, which may lead to future cost savings [8] Market Outlook - Amazon's guidance for the current quarter projects total revenue between $206 billion and $213 billion [11] - AWS is expected to double its power capacity by 2027, with a significant increase in demand for AI and core infrastructure [12] Valuation Comparison - Amazon's forward P/E ratio is currently 28.5, which is lower than Microsoft's 33, suggesting potential for valuation expansion if AWS continues to grow [14][15]