Assessing Amazon (AMZN) Valuation as It Commits $35 Billion to Accelerate Growth in India

Amazon.com (AMZN) is leaning hard into its next growth engine, committing $35 billion to India through 2030 to build out AI capabilities, logistics, and exports in what it sees as a long runway market.

See our latest analysis for Amazon.com.

Even with the latest share price at $230.28 and a relatively modest year to date share price return of 4.57%, the three year total shareholder return of 160.35% shows investors are still backing Amazon’s long term AI and cloud story, even if momentum has cooled in the near term.

If Amazon’s India push has you thinking about other potential winners in the next tech cycle, it is worth exploring high growth tech and AI stocks as a starting point for fresh ideas.

Yet with earnings still compounding, analysts seeing nearly 25% upside to their price targets, and Amazon spending aggressively on AI and India, is the market underestimating its next leg of growth or fully pricing it in already?

Most Popular Narrative Narrative: 1.9% Undervalued

With Amazon.com trading at $230.28 against a narrative fair value of $234.75, the gap is narrow but still points to slightly more upside than the market implies.

Overall I was very impressed from the call and feel very good about the companies long term future. The only two negatives I took from it was AWS not growing to revenue expectations and then also during the Q and A they were asked about AI innovation and so on, and they never really never answered the questions and were just very vague.

Read the complete narrative.

Want to see how, according to Zwfis, revenue growth, rising margins and a richer future earnings multiple all combine into that tight fair value band? The full narrative unpacks the precise assumptions behind those projections and why they still point to upside, even after recent share price strength.

Result: Fair Value of $234.75 (UNDERVALUED)

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

However, sustained AWS underperformance or prolonged supply constraints in power and chips could cap margin expansion and force investors to rethink Amazon’s premium narrative.

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

Another Take on Value

On earnings, Amazon looks pricey at 32.2 times compared with the global multiline retail average of 19.8 times, but roughly in line with peers at 33.2 times and still below a 40.2 times fair ratio. Is this a premium that could expand or a cushion that could compress?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Amazon.com Narrative

If you see the story differently or simply want to stress test the numbers yourself, you can build a full narrative in minutes: 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.

Looking for more investment ideas?

If you only stick with Amazon, you could miss out on the next big winner. Let Simply Wall Street’s Screener surface high quality opportunities for you today.

• Capture potential upside early by targeting these 3605 penny stocks with strong financials that already show solid balance sheets and improving fundamentals.
• Participate in the AI transformation by focusing on these 25 AI penny stocks that pair current revenue traction with scalable technology platforms.
• Seek more balanced risk and reward setups with these 12 dividend stocks with yields > 3% that may increase your income while helping to cushion market volatility.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com