Amazon (AMZN): Revisiting Valuation as FTC Settlement and AI Innovation Refocus Growth Narrative

Amazon.com (AMZN) is back in the spotlight after settling a $2.5 billion FTC investigation related to its Prime membership practices, clearing a cloud of legal risk that has weighed on shares. With this issue resolved, investors are refocusing on the company's expansion into AI-driven products, accelerated AWS growth, and a rising advertising segment.

See our latest analysis for Amazon.com.

Amazon’s momentum has held up even with recent share price volatility. While the stock is down 6.5% over the past month, major product launches and continued leadership in AI and cloud computing have kept long-term sentiment strong. For investors with a longer time horizon, Amazon’s 1-year total shareholder return of nearly 16% and a massive 88% total return over three years highlight that growth is still very much part of the DNA here, even if short-term price swings reflect shifting risk perceptions as the company transitions into its next phase.

If Amazon’s forward-looking moves in AI and new product lines have you feeling inspired, now’s a good time to see what’s happening across other tech and AI innovators—See the full list for free.

With Wall Street price targets about 23% above where shares currently trade and Amazon’s fundamentals pointing upward, the big question for investors now is whether these gains are already priced in or if there is real upside left from here.

Most Popular Narrative: 7.8% Undervalued

With Amazon closing at $216.39, the narrative’s fair value estimate of $234.75 presents a clear divergence, signaling potential upside if the projections hold true.

"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. Especially with a growing need for this industry, it continues to validate this segment of the business."

Read the complete narrative.

Want to see what propels this bullish price tag? A combination of sustained revenue growth, ambitious margin improvement, and expected dominance in strategic segments underpins a surprisingly robust long-term outlook. Curious about the exact figures and assumptions behind these projections? Discover the dramatic thesis driving Amazon’s fair value.

Result: Fair Value of $234.75 (UNDERVALUED)

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

However, persistent AWS growth challenges and intensifying cloud competition remain key risks that could put pressure on Amazon’s long-term valuation story.

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

Build Your Own Amazon.com Narrative

If you think there’s more to the story or want to dig deeper into the numbers on your own terms, it only takes a few minutes to craft your own perspective. 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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