Is Amazon Stock a Buy as Cloud Revenue Continues to Surge?

AMZN's AWS segment grew 39% to $46 billion in Q3, the unit's fastest growth in nearly five years, yet the stock has still underperformed this year.

AMZN now trades at a forward P/E of 23x. The analyst behind the source piece reads that multiple as a buying opportunity given the fundamentals on display.

The cloud acceleration is the headline, but the retail side delivered too. North American operating income jumped 80%, a sign of operating leverage in e-commerce rather than just cloud-driven earnings strength.

The longer-term case rests on AI spending. AMZN is investing heavily in AI infrastructure and custom chips, and the analyst projects AWS growing 40% in 2027-2028, with potential to reach $1 trillion in revenue within 5-10 years. Those are projections, not guidance, and they carry the usual execution risk.

Interpretation: a 39% growth rate on a $46 billion base, paired with an 80% jump in North American operating income, suggests earnings power is outrunning the share price. The 23x forward multiple is the market's current price for that mismatch, and the bull case is that it narrows if AWS growth holds near 40%.

Custom chip investment also connects AMZN to the broader AI hardware conversation, including ARM, though the source draws no direct link between the two.