Core Viewpoint - Amazon has underperformed compared to its big tech peers in 2025, but this underperformance may present a strong buying opportunity as the company is poised for a potential rally heading into 2026, especially following its impressive Q3 results [1] Group 1: Advertising Business Growth - Amazon's advertising segment has emerged as a significant growth driver, with Q3 revenue growing 24% year over year to $17.7 billion, surpassing Netflix's $11.6 billion in the same period [4][2] - The growth of the advertising segment is expected to improve Amazon's overall margins, as advertising businesses typically have superior margin profiles compared to commerce businesses [5][8] Group 2: AWS Performance - Amazon Web Services (AWS) continues to be a leading player in the cloud computing market, with Q3 revenue growing 20% year over year, an improvement from 17% growth in Q2 [6][5] - The growth in AWS is attributed to the increasing demand for AI workloads, with Amazon investing heavily in AI infrastructure, including a significant 150% quarter-over-quarter growth in its Trainium2 custom AI chip business [7][6] Group 3: Margin Improvement - Amazon's gross profit margin is improving due to the rise of high-margin businesses like AWS and advertising, which is a positive indicator for future profitability [12][9] - A higher gross margin allows Amazon to generate greater profits when fully optimized, positioning it favorably compared to traditional commerce businesses [10][11] Group 4: Investment Outlook - Despite a recent stock price increase following strong Q3 results, Amazon remains an attractive buy as it has lagged behind its peers, with potential for significant cash flow generation in the future once fully optimized for profits [13][1]