Amazon's Low Valuation Makes It a Buy, Says Analysts

Amazon's stock has trailed the S&P 500 for most of 2026 but is now in line, up 12% year-to-date. The company's low valuation is a major reason to buy its stock now, with Amazon trading at one of its lowest P/E ratios in over a decade. Its current P/E ratio is 21, and it hasn't been this low since at least June 2026.

This low valuation makes Amazon an attractive investment opportunity, especially considering the company's leadership in e-commerce and cloud computing. Amazon officials argue that its investments in artificial intelligence infrastructure are necessary to regain lost market share and meet demand from its growing backlog of $496 billion in contracts.

The investments may already be paying off as Amazon reported blowout second-quarter earnings, with revenue rising 20% and operating income soaring 43%. Analysts are bullish on Amazon, with 97% rating it a buy and a median price target of $327 per share. This suggests 27% upside for Amazon stock.