Amazon(US:AMZN) The Motley Fool·2026-02-15 05:30Core Viewpoint - Amazon has experienced a decline in stock performance since the beginning of 2025, despite significant growth in revenue and earnings, indicating a drop in its market valuation [1][4][6]. Company Performance - Amazon's stock has decreased by approximately 7% since 2025, while its revenue and earnings have shown substantial increases [4]. - In Q4, Amazon reported a 14% year-over-year increase in overall sales, surpassing the 12% growth from the previous year's Q4 [9]. - AWS, Amazon's cloud computing platform, grew at a remarkable pace of 24% during Q4, marking the fastest growth rate in 13 quarters [10]. Valuation and Market Sentiment - Amazon's current trading valuation is at 26.5 times forward earnings, aligning with the valuation range of other major tech stocks, down from over 30 times previously [8]. - The market appears less willing to pay a premium for Amazon's stock compared to prior years, reflecting a shift in investor sentiment [6]. Future Outlook - The growth of AWS is crucial for Amazon's future, particularly in the context of AI development, as it provides essential computing power for AI models [9][10]. - Amazon plans to invest $200 billion in capital expenditures during 2026, primarily for data centers, which may impact cash flows but is seen as a strategic move to meet AI computing demand [12]. - There is optimism that Amazon's stock will recover throughout 2026 if AWS can maintain its growth trajectory [10][13].