Key Points Amazon's investment in AI is driving tangible results across its various businesses. Its 1 million warehouse robots are contributing to cost savings and profit growth. Amazon's cloud business could accelerate next year, according to one Wall Street firm. 10 stocks we like better than Amazon › When looking for quality growth stocks, investors should consider companies that are benefiting from artificial intelligence (AI). Amazon (NASDAQ: AMZN) remains a solid investment, as the integrat ...

Core Viewpoint - Amazon is positioned to potentially join the $3 trillion market capitalization club by the end of 2026, driven by its leadership in e-commerce, cloud computing, and artificial intelligence [1][2]. Group 1: Market Capitalization and Growth Potential - Amazon currently has a market capitalization of $2.2 trillion, with a projected return of 36% for investors if it reaches the $3 trillion mark [2]. - The company generated $1.59 in earnings per share (EPS) during Q1, reflecting a 62% increase year-over-year, leading to a trailing-12-month EPS of $6.13 and a P/E ratio of 33.5 [14][16]. Group 2: Amazon Web Services (AWS) and AI Strategy - AWS is central to Amazon's AI strategy, focusing on hardware, large language models (LLMs), and software applications [4]. - AWS generated $29.2 billion in revenue in Q1 2025, a 17% increase from the previous year, contributing to 63% of Amazon's operating income [9][12]. - The introduction of the Trainium2 chip can reduce AI training costs by up to 40%, enhancing AWS's competitive edge [5]. Group 3: Competitive Positioning and Future Projections - AWS's AI revenue has seen triple-digit percentage growth, indicating a strong trajectory for future earnings [13]. - If Amazon's P/E ratio aligns with the average of its peers (38), projected EPS of $7.27 in 2026 could lead to a share price of $276.26, resulting in a market cap of approximately $2.95 trillion [17][18]. - Amazon's EPS growth outpaces that of competitors like Apple and Microsoft, suggesting a potential for a premium valuation [16].