Amazon (AMZN): Assessing Valuation After AWS Outage Highlights Internet’s Reliance on Its Infrastructure

Amazon.com (NasdaqGS:AMZN) was back in the spotlight after a technical issue in its AWS cloud business temporarily disrupted high-traffic apps and websites like Reddit, Snapchat, Disney+, and Lyft. Although engineers fixed the problem that same day, the episode renewed conversations about how much of the internet relies on Amazon's infrastructure.

See our latest analysis for Amazon.com.

Amazon’s latest $222.03 share price reflects a bounce after resolving the AWS outage, with the stock posting a 2.56% one-day share price return and a robust 20.2% total shareholder return over the past year. Despite the occasional spotlight on operational risks, recent announcements such as new UFC collectibles and growing logistics partnerships underscore that momentum is still in Amazon’s favor both short and long term.

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With Amazon delivering resilient growth and shares hovering nearly 20% below consensus analyst targets, the real question is whether the current price reflects untapped upside or if the market is already factoring in all of Amazon’s future growth.

Most Popular Narrative: 5.4% Undervalued

While Amazon’s stock has climbed following the recent tech outage, the most popular narrative by Zwfis points to even more upside based on long-term projections. This viewpoint sees Amazon’s fair value above its last close, suggesting the recent market recovery still leaves room for growth.

*Their E-commerce platform is the undisputed leader, especially with its robust options for customers and the scale of its logistics network. AWS is considered one of the best cloud services available to companies, and with a growing need for this industry, it continues to validate this segment of the business.*

Read the complete narrative.

What is driving this higher fair value estimate? It is based on optimistic forecasts for key business lines and accelerated growth, as well as bold assumptions around future profit margins and company innovation. The full narrative reveals what makes these projections stand out from the crowd and hints at a forward-looking thesis built on more than just today's numbers.

Result: Fair Value of $234.75 (UNDERVALUED)

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

However, ongoing cloud competition and uncertainty around Amazon’s AI pipeline could challenge these bullish projections if execution falls short or if rivals gain ground.

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

Build Your Own Amazon.com Narrative

Feel free to dig into the details and piece together your own take on Amazon’s story. Building a personalized view takes just a few minutes with our tools. Do it your way

A great starting point for your Amazon.com research is our analysis highlighting 4 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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