Amazon Shares: Analyst Sees Long-Term Potential Amid Falling Stock Price
Amazon's stock has fallen out of favor with investors in recent times. However, one analyst believes that this is an overreaction and sees potential for long-term growth.
The company recently raised its capital expenditure guidance from $200 billion to $220 billion by 2026. This increase does not translate to more data centers but rather a higher cost for the same technology due to rising memory prices.
Amazon is investing heavily in AI, with a focus on its Bedrock platform and partnerships with OpenAI and Anthropic. The company's strategy is designed to be agnostic to model leadership changes and focuses on providing infrastructure for various AI models rather than competing directly.
The valuation of Amazon stock is low, with a price-to-earnings ratio of 30. However, this does not take into account the non-cash gain from its stake in Anthropic or the impending depreciation costs.