Amazon’s shares (NASDAQ: AMZN) are currently trading about 22% lower than their peak in November 2025, as of February 17. This dip in the market follows the company’s announcement of a $200 billion capital investment plan for 2026, which is a significant increase from last year’s $131 billion. The plan is primarily focused on bolstering Amazon’s initiatives in artificial intelligence (AI).
This situation presents an opportunity for investors. There are several reasons to consider purchasing stock during this phase.
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Tech giants are indeed advancing in the AI field, and Amazon is part of this landscape. The proposed $200 billion investment is substantial, and the expansion of the technical infrastructure is vital for maintaining a competitive edge.
It’s reasonable to question whether Amazon will see a satisfactory return on this investment. But perhaps the impressive performance of Amazon Web Services (AWS), which enjoyed a 24% revenue growth in the fourth quarter, should ease those concerns. The demand for AI products and services is robust, prompting management to push for increased computing capacity.
“AWS remains the top choice for cloud migration among major enterprises and governments,” CEO Andy Jassy stated in a recent quarterly report. “A greater number of the top 500 U.S. startups rely on AWS as their primary cloud provider than the next two competitors combined.”
The competitive advantages that contribute to Amazon’s strong market position further justify buying the stock. There are clear cost benefits to scaling operations, particularly in logistics, which supports rapid and free shipping from online marketplaces. The same applies to AWS, where significant upfront investments are yielding strong profits.
Online marketplaces see advantages through network effects; more sellers draw in more buyers, which, in turn, attracts even more sellers.
For AWS customers, changing cloud providers comes with high switching costs; the consolidation of workflows and employee familiarity with AWS make transitioning to a different provider quite challenging.
Over the past ten years, Amazon’s revenue and operating profit have surged by 570% and 3,536%, respectively. Although growth rates may slow, the upward trajectory should continue. This is due to various long-term trends—including AI, cloud computing, online shopping, and digital advertising—that are expected to fuel the company’s future.
Currently, investors are looking at a price-to-earnings ratio of 28x to incorporate this type of sustainable growth into their portfolios, which is quite close to a ten-year low. Now might be a good moment to consider adding Amazon stock to your investments.
Before making any purchase, it’s worth considering some factors. According to Motley Fool Stock Advisor, the analyst team has highlighted ten other stocks they believe are more promising right now, which do not include Amazon. These selections have the potential for significant returns in the upcoming years.
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