Why I Can’t Stop Buying Amazon Stock

Amazon (NASDAQ:AMZN | AMZN Price Prediction) has delivered accelerating numbers, a widening moat, and a valuation that makes sense for what this company is becoming. I can’t stop buying AMZN stock, here’s why.

Reason 1: AWS Is Reaccelerating Into AI Demand

The most important number in Amazon’s business is the trajectory of AWS growth. In Q1 2025, AWS grew 17% year-over-year. By Q4 2025, that number reached 24%, the fastest growth in 13 quarters. That is reacceleration, and it signals the AI infrastructure buildout is pulling forward real enterprise spending into AWS at a pace that keeps surprising forecasts.

CEO Andy Jassy on the Q4 earnings call: “AWS growing 24% (our fastest growth in 13 quarters), Advertising growing 22%, Stores growing briskly across North America and International, our chips business growing triple digit percentages year-over-year.”

Amazon’s Trainium and Graviton chips now carry a combined annual revenue run rate of over $10 billion, growing at triple-digit percentages year-over-year. Trainium2 is fully subscribed. That is a structural cost and revenue advantage that compounds over time.

Reason 2: The Advertising Engine Is a Hidden Compounder

Most investors think of Amazon as a retailer or cloud company. It is also one of the three dominant digital advertising platforms. Advertising revenue in Q4 2025 hit $21.317 billion, up 23% year-over-year. For full year 2025, advertising grew from 18% in Q1 to 23% in Q4, with no sign of deceleration.

This segment carries high margins and benefits directly from Amazon’s retail flywheel. Advertisers reach customers already in a buying mindset.

The Rufus AI shopping assistant, now used by 300 million customers and driving approximately $12 billion in incremental annualized sales, deepens that flywheel further. The more Amazon knows about purchase intent, the more valuable its ad inventory becomes. That self-reinforcing advantage strengthens every year.

Reason 3: The Valuation Is Reasonable Given Earnings Trajectory

Amazon trades at a trailing P/E of 35x on full-year 2025 EPS of $7.17, which beat the consensus estimate of $7.07. Net income for the full year grew 31.09% year-over-year to $77.670 billion. Operating cash flow hit $139.514 billion, up 20.4% year-over-year.

Shareholders’ equity expanded 43.74% year-over-year to $411.065 billion. For a company compounding earnings at this rate, a 35x multiple is reasonable. The forward P/E compresses to 30x on forward earnings of $8.32, with a consensus price target of $281.18 against a current price of $248.50.

The Risk Worth Watching

Free cash flow declined sharply in FY2025, falling to $11.194 billion as capex surged to $131.819 billion, with $200 billion planned for 2026. That is real pressure on near-term cash generation.

But Jassy’s framing matters: “We expect to invest about $200 billion in capital expenditures across Amazon in 2026, and anticipate strong long-term return on invested capital.” The capex front-loads infrastructure for a multi-year demand cycle.

Operating cash flow still grew 20.4% year-over-year. The cash generation engine is intact. The spending is a choice, not a distress signal.

The Investment Case

The stock is up 38.37% over the past year and still trades below its 52-week high of $258.60. Q1 2026 guidance calls for 11% to 15% revenue growth, and AWS enters that quarter with the strongest growth momentum in years.

Amazon is actively building new moats in custom silicon, satellite connectivity, agentic AI, and same-day logistics. The 694.07% ten-year return was built on exactly this kind of patient accumulation through investment cycles. The data supports continued accumulation for long-term investors.