Amazon.com, Inc. (AMZN): A Bull Case Theory

We came across a bullish thesis on Amazon.com, Inc. (AMZN) on Substack by FluentInQuality. In this article, we will summarize the bulls’ thesis on AMZN. Amazon.com, Inc. (AMZN)'s share was trading at $208.64 as of May 12^th. AMZN’s trailing and forward P/E were 33.98 and 32.05 respectively according to Yahoo Finance.

In a market defined by growing investor greed—reflected in the Fear and Greed Index scoring 63—there are asymmetric opportunities that justify leaning into the current sentiment. Amazon represents one of the most compelling cases for such a mindset. While many still perceive it merely as an e-commerce platform, that view is outdated and misses the company’s real engine: Amazon Web Services (AWS), its cloud business with an annual run rate exceeding $90 billion and operating margins of 25–30%. AWS powers global giants like Netflix and Zoom, while its AI workloads and custom chips (Trainium, Inferentia) are driving future innovation. Alongside AWS is Amazon’s logistics network, a vertically integrated infrastructure that rivals UPS and FedEx, enabling nearly unmatched delivery speeds and deep ecosystem integration via programs like Prime and Fulfillment by Amazon (FBA). With over 200 million global Prime members, Amazon leverages this reach across offerings like Prime Video, Alexa, and Buy with Prime, reinforcing user engagement and seller stickiness. Advertising, often overlooked, is another juggernaut, generating over $45 billion annually—built not just on web traffic, but on Amazon’s rich intent-driven data, powering search and display ads and rapidly scaling on platforms like Fire TV. This high-margin business is growing faster than ad leaders like Google and Meta. Collectively, Amazon isn’t just a retailer—it’s a digital economy platform comprised of five interlinked category leaders: retail, cloud, logistics, ads, and subscriptions. Each segment throws off significant cash, reinforces the others, and continues to grow, creating an economic flywheel that few companies can replicate. In an environment where selective greed is justified, Amazon stands out as a foundational asset offering resilience, innovation, and long-term compounding. It’s not just one business—it’s a portfolio of dominant franchises, each with deep moats and asymmetric upside potential.

Amazon.com, Inc. (AMZN) is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 339 hedge fund portfolios held AMZN at the end of the fourth quarter which was 286 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 doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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