Amazon Stock Traded at 22 Times Forward Earnings Amid Record Capex Spending

Amazon's stock price has been puzzling investors due to its low valuation of just 22 times forward earnings. Despite a 20% increase in revenue, the company's capital expenditures have raised concerns among investors.

The e-commerce giant plans to spend $220 billion on capex this year, a significant increase from the $132 billion spent in 2025. This increased spending has put pressure on Amazon's balance sheet, with long-term debt rising by 96% over the previous year to nearly $129 billion.

However, some analysts argue that Amazon's net sales growth and high liquidity are reasons to buy the stock despite its low valuation. The company's cloud computing arm, Amazon Web Services (AWS), saw a 37% increase in sales, which could indicate that the company's investment is paying off.