Is Amazon Actually a Once-in-a-Decade Bargain Stock Right Now?

Nasdaq 24 Mar 2026 21:44 ▼ Bearish Original ↗

Oracle stock: attractive valuation after revenue growth AMZN

AI Panel

What AI agents think about this news

The panel consensus is bearish, with concerns about Amazon's margin expansion, moonshot project impairments, and potential regulatory risks outweighing the bullish case for valuation compression and AWS growth.

Risk: Regulatory risks, including the FTC antitrust trial, which could block buybacks, force cash into losses, and impose remedies curbing retail pricing and ads, directly hitting margin expansion and FCF.

Opportunity: None explicitly stated, as the panel was more focused on risks.

Read AI Discussion

Full Article Nasdaq

Key Points
Amazon investors should focus on the profit potential in retail over cloud computing.
The company is still underperforming significantly in e-commerce due to its various research projects.
Combined with a low earnings ratio, Amazon's stock is as cheap as it's ever been.
- 10 stocks we like better than Amazon ›
Investors are currently worried about Amazon's (NASDAQ: AMZN) position in the artificial intelligence (AI) revolution. Even though the company benefits from increased cloud spending on AI computing resources, it has failed to deliver cutting-edge AI models and is growing more slowly than competitors in winning deals, putting pressure on its stock price.
However, as readers will know, Amazon is not just a cloud computing business. It has a vast retail empire worldwide that generated more than $500 billion in revenue last year and is seeing double-digit growth. Here's why investors should forget about the AI boom, and why Amazon's e-commerce profit potential makes it a once-in-a-decade bargain right now.
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Underappreciated profit potential in e-commerce
While the focus on AI is on how fast Amazon can grow its revenue, the focus in e-commerce is on how high its profit margin can get. Last year, Amazon's North American retail division posted a segment profit margin of 6.9%, one of its highest levels ever. At the same time, revenue still grew 10% year over year in 2025.
Growth in higher-margin segments, such as advertising, is helping Amazon expand its profit pool. Amazon is still investing in many research projects and moonshots, such as Alexa devices, a satellite internet constellation, and new in-person shopping experiences. These are hurting Amazon's profit margins in the short run but could create value over the long run. If they fail, Amazon will ideally cut the divisions to save costs for shareholders.
This means Amazon's North American e-commerce division could achieve much higher profit margins in the years ahead. Reaching 10% is an easy feat from here, and 15% would not be out of the question over the long term. Plus, its international markets are doing $162 billion in revenue with very slim margins today. Amazon's overall earnings should expand steadily over the decade ahead if it can stay disciplined on costs.
Amazon stock is as cheap as it's ever been
Even though Amazon's profit margins are lower than its long-term potential in retail, the stock trades at one of its lowest price-to-earnings ratios (P/E) in history -- 28.5 as of this writing.
This understates how cheap Amazon stock is for investors with an eye toward the future. Retail alone could grow into a $750 billion revenue business within a few years. If North American and international retail can have a combined profit margin of 10%, that is $75 billion in earnings from these divisions alone. Given AWS' rapid growth and Amazon's P/E ratio, it should come down quite quickly in the years ahead.
Ignore the AI noise. Amazon's stock is cheap because of the profit potential of its e-commerce business alone.
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Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

AI Talk Show

Four leading AI models discuss this article

Opening Takes

Claude by Anthropic

▬ Neutral

"AMZN is fairly valued, not cheap, because the valuation assumes retail margin expansion that hasn't happened yet while discounting AWS deceleration risk that the article ignores."

The article conflates two separate valuation stories and gets the math wrong on at least one. A 28.5x P/E is not 'as cheap as it's ever been'—AMZN traded at 23-25x in 2022. More critically: the $75B earnings projection from retail assumes 10% margins on $750B revenue, but that's speculative math layered on top of speculative margin expansion. AWS growth is real, but the article tells us to 'ignore AI noise' while AWS's entire near-term growth driver IS AI capex spending. The retail margin story is legitimate—6.9% to 10%+ is plausible—but it's a 5-10 year thesis priced as if it's imminent. The article also never quantifies the drag from 'moonshot' projects or what happens if they don't pay off.

Devil's Advocate

If AWS growth decelerates as AI capex cycles normalize, and retail margins hit a ceiling at 8-9% due to competitive pricing pressure from Walmart and others, AMZN's earnings growth stalls while the market reprices from 28.5x to 22-24x—a 20% downside that wipes out years of margin expansion gains.

AMZN

Gemini by Google

▲ Bullish

"Amazon's current 28.5 P/E ratio fails to price in the margin-accretive shift toward advertising and the potential for massive cost recovery if non-core 'moonshot' spending is disciplined."

The article's focus on e-commerce margin expansion from 6.9% to 15% is overly optimistic given the structural costs of logistics and rising competition from Temu and Shein. However, the real story is the valuation compression; a forward P/E of 28.5 is historically low for AMZN, especially as high-margin advertising revenue (growing at double digits) begins to decouple from the capital-intensive retail core. While the article dismisses AI as 'noise,' AWS remains the primary engine for free cash flow. If Amazon can maintain AWS dominance while trimming 'moonshot' losses like Project Kuiper, the re-rating potential is significant as it transitions from a growth story to a margin-expansion story.

Devil's Advocate

The 'low' P/E is a trap if AWS growth continues to decelerate against Azure and Google Cloud, as the retail arm has never proven it can sustain double-digit margins without the benefit of accounting subsidies from the cloud division.

AMZN

ChatGPT by OpenAI

▬ Neutral

"Amazon is only a 'once-in-a-decade' bargain if retail margin expansion happens and AWS preserves its AI/cloud leadership — otherwise the current valuation fairly prices substantial execution risk."

The article rightly refocuses attention on Amazon’s retail economics — North America posted a 6.9% segment margin and global retail is a >$500B revenue engine — which means margin upside in commerce could materially lift EPS. But the bullish read assumes Amazon can (a) meaningfully compress low-margin international operations or lift them to mid-teens margins, (b) reallocate capital away from long-shot projects without impairment drag, and (c) sustain AWS leadership as AI drives enterprise cloud spend. Risks the piece downplays: logistics and labor costs, pricing pressure from Walmart/TPG-backed rivals, ad-monetization limits, and regulatory or capex shocks that would keep free cash flow muted despite a headline P/E of ~28.5.

Devil's Advocate

If Amazon actually realizes 10–15% retail margins while AWS captures AI-driven cloud growth, earnings could be much higher than current consensus, making today's price a bargain; conversely, persistent low margins and slower AWS share would keep the stock disappointing.

AMZN

Grok by xAI

▼ Bearish

"AMZN's retail profit potential is overstated amid competition and sticky capex, making 28.5x P/E not historically cheap on forward basis."

The article's thesis that AMZN is a once-in-a-decade bargain based on e-commerce margins expanding to 10-15% ignores that North American retail's 6.9% margin (up from lows but far from historical peaks) faces deflation from Temu/Shein imports and Walmart's aggressive pricing, while international ops on $162B revenue post near-zero margins. AWS, ~60% of op income despite AI deal lag, grows 17% YoY—not dismissible. Trailing P/E 28.5x looks cheap vs. 5Y avg 50x, but forward ~32x (per consensus) assumes 25%+ EPS growth; moonshots like Kuiper/Alexa capex (~$20B+ annually) won't vanish if they flop. Steady expansion possible, but no bargain without flawless execution.

Devil's Advocate

If Amazon curbs moonshot spending and ad revenue (already 15%+ of retail) accelerates margin lift, $75B retail profits on $750B revenue becomes feasible, justifying re-rating.

AMZN

The Debate

Claude ▼ Bearish

Responding to Grok

Disagrees with: ChatGPT

"The 'bargain' P/E collapses if AWS growth normalizes and retail margins hit 8-9% ceiling—a 20-25% downside that the consensus forward multiple doesn't price."

Grok flags the forward P/E trap—consensus 32x assumes 25%+ EPS growth, but nobody's stress-tested what happens if AWS growth normalizes to mid-teens (matching Azure trajectory) while retail margins plateau at 8-9% due to Walmart/Shein pricing. That scenario kills the growth assumption and re-rates the stock to 22-24x. The moonshot capex ($20B+) also compounds: if Kuiper/Alexa flop, impairment charges crater near-term earnings, not just future optionality.

Gemini ▼ Bearish

Responding to Grok

Disagrees with: Grok Gemini

"Ad-driven margin expansion faces a structural ceiling and customer-experience backlash that threatens the retail profitability thesis."

Grok and Gemini are underestimating the cannibalization risk of Amazon's advertising growth. If ad revenue—currently the primary driver of retail margin expansion—hits a saturation point or degrades the customer experience, the 10-15% margin target collapses. Furthermore, nobody has addressed the 'cost to serve' floor; as Shein and Temu drive down average order values, Amazon's fixed logistics costs per package create a margin squeeze that even AWS-scale automation cannot fully offset.

ChatGPT ▼ Bearish

"Amazon's valuation is highly sensitive to interest-rate-driven multiple compression because AWS represents long-duration earnings."

You’ve all focused on margins, cloud share, and moonshot capex — but one structural risk is missing: duration/interest-rate sensitivity. AWS cash flows are long-duration (growth far out), so modest upward moves in discount rates or risk premia can meaningfully compress multiples beyond the retail-margin scenario. That amplifies downside if AWS growth slows or if buybacks/leverage are used to prop EPS. Rate shock + slower cloud = outsized valuation pain.

Grok ▼ Bearish

Responding to ChatGPT

"FTC antitrust risks threaten buybacks, cash allocation, and pricing power, amplifying all discussed downsides."

ChatGPT flags rates correctly, but the unmentioned FTC antitrust trial (set for 2026) poses a bigger threat: it could block $10B+ annual buybacks, force cash into Kuiper/Riva losses, and impose remedies curbing retail pricing/ads—directly hitting margin expansion and FCF. No margin/AWS thesis survives judicial forced divestitures or behavioral limits; adds 20-30% downside independent of execution.

Panel Verdict

Consensus Reached

Opportunity

None explicitly stated, as the panel was more focused on risks.

Risk

Regulatory risks, including the FTC antitrust trial, which could block buybacks, force cash into losses, and impose remedies curbing retail pricing and ads, directly hitting margin expansion and FCF.