A Look at Amazon (AMZN) Valuation After Project Kuiper’s Commercial Aviation Launch and New AI Push

If you’re holding shares in Amazon.com (AMZN), you might be wondering what comes next after the latest Project Kuiper announcement. Amazon just revealed that JetBlue Airways will be the first commercial airline to offer its satellite internet service, showing that Amazon is ready to play a bigger role far beyond traditional e-commerce. Add in their push to launch an AI-powered workspace suite and the persistent optimism around AWS and Amazon Ads, and it is clear why the stock is back in the spotlight with renewed growth stories fueling conversation.

This mix of business wins and expansion has certainly caught the market’s eye in recent months. After slipping on news that its Prime Day sign-ups missed internal targets, Amazon shares have bounced back, now up 36% over the last year and adding nearly 9% in the past three months alone. Recent events point to growing momentum in areas that go well beyond online retail, as cloud, AI, and advertising continue to be meaningful drivers.

The question for investors now is, with shares climbing and its business broadening, whether Amazon is undervalued at today’s levels or if all this future growth has already been factored in.

Most Popular Narrative: 4.4% Overvalued

According to MichaelP, the latest narrative suggests Amazon shares are trading slightly above fair value, driven by robust growth across key businesses but tempered by expectations for continued heavy reinvestment and the resulting impact on near-term cash flows.

"Continued reinvestment will suppress short to medium-term cash flows and hide profitability. Operating leverage will drive revenue growth higher than fixed cost growth, and operating margins will increase."

Can Amazon’s relentless expansion be reconciled with its bigger-than-ever price tag? This narrative relies on bold assumptions not just about future earnings, but about the ability of core business lines to boost profits as cash is poured back into growth. Curious to see which financial levers matter most? Want to know what future profit multiple underpins this outlook? Dive into the complete narrative to discover the pivotal drivers and projections that set this valuation apart.

Result: Fair Value of $222.55 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing regulatory pressures and the threat of a prolonged recession could both serve as catalysts to shift the current growth trajectory.

Find out about the key risks to this Amazon.com narrative.

Another View: The DCF Model Shows Undervaluation

While the most popular narrative claims Amazon is trading above its fair value, the SWS DCF model takes a different approach and finds the stock is actually undervalued. Which scenario makes more sense for Amazon’s future?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Amazon.com for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Amazon.com Narrative

Of course, if you’d rather dig into the numbers and reach your own conclusions, it takes just a few minutes to craft a personal outlook. Do it your way.

A great starting point for your Amazon.com research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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