Is Amazon Stock a Buy for 2026?

Core Viewpoint - Amazon's stock underperformed in 2025, rising only about 5% compared to the S&P 500's 16% increase, but there are strong indicators that 2026 could see a rebound for the stock [1][2]. Group 1: Business Performance - Despite the stock's underperformance, Amazon's business results in 2025 were strong, suggesting potential for a great stock pick in 2026 if the company continues to deliver solid results [2]. - Amazon's various business segments, including online stores, third-party seller services, advertising services, and subscription services, have all recently achieved high performance levels [4][5]. - The advertising services segment saw a significant year-over-year revenue increase of 24%, reaching $17.7 billion, making it the fourth-largest component of Amazon's business [5]. Group 2: Profitability and Growth Potential - The operating margin for Amazon's advertising business is estimated to be between 30% to 40%, significantly higher than the North American commerce segment's margin of 4.5% [6]. - Continued growth in advertising services could lead to a substantial increase in Amazon's operating profits, indicating a strong potential for stock price appreciation in 2026 [7]. - The overall strength of Amazon's various business divisions, particularly its advertising service and AWS, positions the company favorably in the market [8].