Amazon's Underperforming Stock Offers Attractive Valuation

Amazon's stock has underperformed in recent months, gaining only 2.5% over the last three months through July 31, compared to the S&P 500 index's 3.9% gain.

The company's shares have trailed growth stocks as well, with the S&P 500 Growth index increasing 4.2% during the same period.

However, Amazon remains a dominant player in cloud computing and online retail, commanding nearly 36% of U.S. e-commerce sales in 2025 and holding a leading market share in cloud-computing business with 28%, followed by Microsoft's Azure at 21% and Alphabet's Google Cloud at 14%.

The company's AWS business has been driving growth, with a 36.8% year-over-year gain in the second quarter to $42.2 billion, resulting in a 63.6% increase in operating income to $16.6 billion.