Is Amazon Among the Best Stocks to Buy Right Now? Here's What the Data Shows

For investors seeking the best stocks to buy in today’s market, Amazon often comes up in discussions—yet the company has quietly underperformed compared to other tech leaders. Despite strong financial results in recent quarters, Amazon’s stock has lagged significantly behind the Nasdaq and S&P 500, raising an important question: Is this a buying opportunity or a warning sign?

Why Amazon Lags Behind Other Tech Giants—And Why That Might Be Wrong

Amazon’s recent performance tells a curious story. While the company remains a cloud infrastructure powerhouse, its stock gains have fallen short of the broader market rally, particularly the surge in AI-driven stocks among the so-called Magnificent Seven tech companies. Over the past five years, Amazon’s returns have trailed the Nasdaq Composite index, and in recent months, the gap has only widened.

The culprit? Market perception. Amazon was hit harder than peers during pandemic disruptions and inflationary pressures, and investors seem to have extended that skepticism even as conditions normalized. However, the company’s recent financial performance suggests the market may be undervaluing a genuine turnaround.

Three Growth Engines That Make Amazon a Potential Buy

When evaluating whether Amazon is among the best stocks to buy right now, consider its three distinct growth drivers:

Cloud Infrastructure Leadership: Amazon Web Services (AWS) remains the dominant force in cloud computing, commanding roughly 32% of the global market. As artificial intelligence demand accelerates, AWS is positioned to capture significant new revenue streams. The company’s cloud business has delivered robust growth in recent quarters, far outpacing analyst expectations.

E-Commerce Recovery: After years of sluggish growth, Amazon’s core retail business has rebounded strongly. The platform’s inherent advantages—global logistics network, customer data, and operational efficiency—have positioned it well in recent months. This segment now contributes meaningfully to overall profitability.

Digital Advertising Expansion: Often overlooked, Amazon’s advertising business has become a rapidly growing revenue stream. By leveraging shopper behavior data, the company has built an advertising platform that rivals Google and Meta in certain categories. This business carries high margins and compounds quarterly returns.

The AI and Automation Opportunity for Long-Term Investors

Beyond current revenue streams lies a substantial opportunity: automation and robotics in e-commerce fulfillment. Amazon has invested heavily in warehouse automation technologies. As these systems scale, they have the potential to dramatically improve margins in the e-commerce business—a transformation that could unlock significant shareholder value over the next decade.

The convergence of AI infrastructure demand (via AWS) and operational automation (in e-commerce) positions Amazon for accelerating profitability that the market may not yet be pricing in.

Should You Add Amazon to Your Portfolio of Best Stocks?

The investment case hinges on a simple premise: Is the market underestimating Amazon’s current momentum and future potential? Recent financial results suggest yes. The company trades at a valuation that doesn’t fully reflect its leadership position in cloud services, the rebound in e-commerce, or the upside from automation efficiency gains.

For investors asking whether now is the right time to buy, the data presents a compelling case. Amazon’s underperformance relative to other tech leaders may represent a genuine market inefficiency—one where fundamentals have improved faster than valuations.

History offers perspective here: Netflix’s stock, when recommended as a buy in late 2004, would have returned over 500,000% by 2025. Nvidia, recommended in 2005, delivered over 1,000,000% returns. While past results don’t predict the future, they illustrate how markets periodically misprice transformative companies.

Amazon may not be a household name among AI investors right now, but its exposure to cloud infrastructure, combined with operational improvements and margin expansion potential, makes it worthy of serious consideration for long-term portfolios.