The debate
When it comes to the best stock to buy in the Mag 7 many people say $META ( ▲ 1.31% ) and its at an incredible valuation and is a great pick but I prefer $AMZN ( ▲ 0.53% ) a lot more and I will list out a few reasons.
Amazon isn’t just e-commerce anymore it’s:
AWS (cloud)
Advertising (high-margin)
Logistics infrastructure
With an incredible valuation on top of that.
Let’s talk valuation
Amazon currently trades at ~26x forward earnings, a significant discount to its historical ~40x average.
In other words, the market is pricing Amazon cheaper today than it has for most of the past decade… despite the business being stronger and more profitable than ever.
“Some of the highest quality businesses in the world are trading at extremly cheap prices.
…One of the best times in a long time to buy quality.
Ignore the bears”
The sector that will benefit most from AI
If you couldn’t already guess from the photo above. The sector that will get the biggest boost is robotics.
Amazon is aggressively deploying robotics across its fulfillment network, from warehouse robots that handle picking and sorting, to AI-driven logistics systems that optimize operations, to automation that replaces repetitive labor.
Why does this matter?
Labor is one of Amazon’s largest expenses, and robotics directly reduces the cost per package. At Amazon’s scale, even small efficiency improvements can translate into massive profit upside.
Higher margins = more profits and expansion to more sectors
Counter Argument
The CapEx Spend
Amazon’s heavy CapEx is often seen as a risk, but it’s actually a key part of the bull case.
Much of this spending is going into long-term infrastructure like AWS, logistics, and AI, strengthening Amazon’s moat and making it harder for competitors to catch up.
It’s also focused on high-margin segments, meaning today’s investment can drive higher profitability over time.
At the same time, CapEx is improving efficiency. Investments in robotics and automation help lower fulfillment costs, setting up future margin expansion.
The key point: this isn’t wasteful spending—it’s Amazon investing today to dominate tomorrow.
TOOLS
The Upside of Amazon at its current price
Amazon is currently trading around $212, while the average 12-month price target from 46 analysts sits at ~$284, implying over 30% upside.
Even the high-end estimate of $325 suggests significant room for growth, indicating strong confidence from Wall Street.
This is without the robotics bull case or with margins improving as well!
Hope you enjoyed reading.
This is my first of many in my newsletter.
Would love feedback on my X on what to improve.
Will try and make this very consistent.
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Question of the Day: “What is your favorite stock market buy right now? 👀
Until next time,
Net