Analyst Says Amazon(AMZN) Among the Best Undervalued AI Stocks to Buy - Here's Why

We recently published 10 Stocks Moving on Buzzing News as Analyst Issues Strong Warning About AI Valuations. Amazon.com Inc (NASDAQ:AMZN) is one of the stocks moving on buzzing news.

Bill Baruch, Founder & President of Blue Line Capital, said in a recent program on CNBC that Amazon is one of the top names to own amid an attractive valuation and Cloud growth.

“The stock is trading at 25 times forward earnings right now, one of its lowest valuations ever. We expect AWS to reaccelerate, maybe around 19% year-over-year revenues, and profitability to accelerate. But what really got us yesterday to pull the trigger was that it tested the 200-day moving average on Friday and responded into yesterday. The broader market had another clean, constructive pullback. That’s been the trend—you pull back, you bottom out quickly, and then rally. I think the market in general is setting the stage for new record highs, maybe after today or tomorrow. We like to look at opportunities within that framework. So if Amazon.com Inc (NASDAQ:AMZN) gets out above 230, I think you’re also going to see those flows into a name that hasn’t done much this year. If it gets above 230, a lot of people are going to chase it. So I think it’s a really great backdrop here to be adding and increasing Amazon.com Inc (NASDAQ:AMZN). We were at a 4.5% position, and we’ve increased it to a 6% position”

Photo by Austin Distel on Unsplash Amazon stock has been out of the headlines while other Mag. 7 members keep gaining the limelight. Why? Two major factors are impacting the stock. Tariff-related headwinds and weakening consumer buying power have been an overhang for the company’s e-commerce business. But more than that, Wall Street has been spooked by a relative slowdown in the company’s Cloud business. In the second quarter, AWS grew 17.5%, a deceleration compared to the previous few quarters. In the same period, Microsoft Azure grew 26% and Google Cloud rose 32%. What’s ailing AWS? The cloud market is going through a structural change amid the AI wave. AWS has always been focused on infrastructure (IaaS), allowing customers to build their own applications with flexibility. However, companies are now preferring AI-first cloud platforms with strong integration with generative models. This helps Microsoft (OpenAI) and Google (Gemini) because of their strong AI and app ecosystem.

Mairs & Power Balanced Fund stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its second quarter 2025 investor letter:

“The Fund also started a new position in Amazon.com, Inc. (NASDAQ:AMZN) in the second quarter, where the company is well positioned to continue capturing market share in retail while also growing its market leading cloud business. The Fund took advantage of weakness in the stock during April to start the position as tariff news and a precipitous market decline provided an opportunity to build a position.”

While we acknowledge the 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.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.