Amazon Stock Looks Undervalued as Cash Flow Surges

Amazon's cash from operations has more than tripled since 2022, reaching $161 billion in the second quarter. Despite this surge, the stock's price-to-cash flow multiple remains relatively low at about 17. In comparison, it traded at a higher multiple of 25 or more before the 2022 bear market.

The company's largest profit contributor is Amazon Web Services (AWS), which saw its revenue climb 37% year over year in Q2, excluding currency changes. This growth should translate into higher cash flow over time, driven by demand for AI cloud services.

With both the e-commerce and AWS businesses accelerating, investors are getting better value for their shares. Considering this disconnect between Amazon's surging cash flow and its relatively stable share price, now might be a good time to buy.