Should You Avoid Amazon Stock, or Is This a Once-in-a-Decade Buying Opportunity?

Core Insights - Amazon's stock has underperformed the S&P 500 over the past five years, with a cumulative increase of only 23% compared to the S&P 500's 88% return [1][2] Investment Concerns - Investor concerns regarding Amazon include its competition in artificial intelligence, significant capital expenditure plans, and the lack of profitability in its e-commerce and retail segments [2] - Amazon plans to spend $200 billion on capital expenditures in 2026, significantly higher than the record $132 billion in 2025, which may exhaust its $140 billion in operating cash flow and necessitate taking on debt [3] Cloud Computing Potential - Amazon Web Services (AWS) is experiencing a backlog in demand that is expected to last for years, indicating that demand for cloud computing exceeds supply [4] - AWS generated $129 billion in annual revenue with a 35% operating margin, growing 24% year over year last quarter; if this growth continues, AWS revenue could approach $250 billion and operating income could reach nearly $90 billion in three years [5] Retail Business Insights - Amazon's retail business, which encompasses e-commerce, subscriptions, advertising, and physical locations, is still undervalued in terms of profit potential [6] - Profit margins in North America were reported at 7% in 2025, but this figure does not fully reflect the potential of various segments, including research projects like Alexa and Amazon Leo, which may currently be cash-intensive but have the potential to become significant revenue streams in the future [7]