Amazon Stock at $255: Is the Bear Market Over?

Amazon's stock has been underperforming this year despite its strengths in e-commerce, cloud computing, and artificial intelligence. As of September 7th, the company trades at around $255 per share. While some may think it's a buy at this price, others are concerned about Amazon's high capital expenditures and negative free cash flow.

Amazon has forecasted $220 billion in capital expenditures for this year, up from $132 billion in 2025. This spending is likely accelerating the company's revenue growth, with yearly net sales increasing by 20% in the second quarter of 2026. However, the company has borrowed tens of billions of dollars to fund these expenditures and reported a negative free cash flow of $7.6 billion over the trailing 12 months.

Despite these concerns, Amazon's P/E ratio has fallen to 21, a relatively low level considering its past performance. The company also remains in a strong position to lead in AI, with its cloud computing business Amazon Web Services experiencing significant growth. While there is a risk that the AI spending becomes untenable or difficult to justify, many analysts believe that Amazon is likely a long-term buy at $255 per share.