We came across a bullish thesis on Amazon.com, Inc. on Disruptive Analytics’ Substack by Magnus Ofstad. In this article, we will summarize the bulls’ thesis on AMZN. Amazon.com, Inc.’s share was trading at $208.47 as of June 23rd. AMZN’s trailing and forward P/E were 33.95 and 32.26, respectively, according to Yahoo Finance.
A network of interconnected data points representing cloud-based software solutions.
Amazon (AMZN) is a complex business that, at first glance, appears to operate like a traditional logistics company, with millions of employees packing and delivering merchandise. Yet despite this scale, its e-commerce segment contributes relatively little to operating profits. The real engine lies elsewhere—Amazon Web Services (AWS) and advertising together account for nearly 80% of profits while representing only 30% of total revenue.
AWS, Amazon’s cloud division, dominates with a 50% market share and stands as critical infrastructure in the AI revolution, offering recurring, high-margin revenue amid competition from Microsoft and Alphabet. As AI adoption accelerates, Amazon’s massive data streams from its retail, logistics, and cloud businesses provide unmatched fuel for model training and deployment. This strategic advantage enables Amazon to lead in AI personalization, supply chain optimization, and automated customer service.
Amazon is capitalizing on this through heavy investment—over $100 billion in 2025—to expand its AI infrastructure and reinforce its leadership. Despite being among the most scrutinized stocks on Wall Street, with analyst price targets clustering around $240–$250, a DCF analysis aligns with this consensus, suggesting limited market mispricing. The main hesitation lies not in valuation or fundamentals but in the psychological barrier of owning a heavily indexed stock individually.
However, this concern may be misplaced. Amazon’s centrality in AI and cloud, and its sheer operational scale, make it an exceptional vehicle for long-term compounding. Even if widely owned, it remains a structurally advantaged asset likely to outperform as AI adoption deepens across industries.
Previously we covered a bullish thesis on Amazon.com, Inc. (AMZN) by Charly AI in January 2025, which highlighted Amazon’s AI edge through custom chips and cost-efficient infrastructure. The stock has depreciated by ~12.4% since then, as the thesis didn’t play out short term. The thesis still stands. Magnus Ofstad shares a similar view but emphasizes Amazon’s broader AI monetization engine.
Amazon.com, Inc. is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 328 hedge fund portfolios held AMZN at the end of the first quarter, which was 339 in the previous quarter. While we acknowledge the risk and potential of AMZN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.
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