Stock of the Week: Amazon - Delivers a Powerful Quarter with Accelerating Growth
Q3 results highlight accelerating growth in AWS and a strong growth in e-commerce
Here is the 38th edition of “Stock of the Week”. You can find all the previous analyses and my articles on my main page (for an easier search, use a computer, mobile version is harder to navigate).
Here is the link to the previous “Stocks of the Week” as well
Amazon posted an exceptionally strong quarter, marked by expanding margins and accelerating growth. But what comes next and is now still a good time to buy? Let’s take a closer look.
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The stock at a glance
Recent news
Prime Day event sets record with $24.1B in US online spending, a 30% increase YoY
Same-day and next-day delivery is expanding to over 4,000 smaller US cities, towns, and rural areas, reaching tens of millions more customers by year-end
CAPEX is increasing to $125B focused on automation, AI and cloud infrastructure
Amazon is expanding in South America to capitalize on 25% annual digital commerce growth competing aggressively with Mercadolibre
Amazon confirms it has replaced 14,000 humans with robots amid first wave of massive layoff
Last earnings report
Amazon reported 13% revenue growth, driven by a strong 20% increase in AWS. The company’s Q4 guidance of $206B – $210B came in line with expectations. EPS surged 36% YoY, underscoring continued profitability momentum.
Analysts’ recommendations
Oct, 30. Jefferies. Buy. $265 —> $275
Oct, 30. RBC. Buy. $240
My analysis
AWS growth is accelerating, and that is not the only bright spot, Amazon’s e-commerce segments are also showing impressive strength. On the top line, the company still has multiple growth avenues ahead, from AI-related services to geographic expansion
The core of the investment thesis, as I discussed in my previous article on Amazon, remains that solid revenue growth will be amplified by continued margin expansion.
This margin improvement is already translating into strong EPS growth, and it could persist thanks to ongoing efficiency gains, particularly through automation initiatives like the recent deployment of warehouse robots
From a valuation perspective, the stock is not cheap. The 2026 PE ratio is expected to be slightly above 30x, and 2027 around 26x. While this is not excessive given Amazon’s quality and growth profile, it is also not particularly compelling at current levels. I would consider waiting for a pullback before adding to positions
Technical analysis
I have defined three buying zones that I find interesting for long-term investments during pullbacks. While these zones may not be reached, I am prepared for a market (or stock) consolidation to seize long-term opportunities. For me, this approach offers a better risk/reward ratio.
Of course, this is just my opinion, and I am sharing it with you, but each investor should decide on their own investment style. With that said, here are my three buying zones for Amazon.
Buying zone 1. $200
Buying zone 2. $170
Buying zone 3. $150
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Used source: Marketscreener.com. Affiliate link just here
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