Amazon Stock Seen Undervalued with 33% Upside Amid Strong AWS Growth

Amazon's stock is seen as undervalued by analysts, who predict a 33% upside in the next year. This optimism stems from the strong growth of Amazon Web Services (AWS), which saw its fastest growth in 18 quarters at 36.7%. AWS is expected to become a trillion-dollar annual revenue business under CEO Andy Jassy's vision.

The bull case for Amazon's stock highlights the company's strong operating margins, AI and chip business growth, and advertising revenue gains. However, risks include high capital expenditures and negative free cash flow.

Despite these risks, the growth trajectory and valuation relative to peers Alphabet and Microsoft support a buy recommendation with 90% confidence. The 24/7 Wall St. price target of $343.50 implies a 32.8% upside from the current $259.39.