Is Now a Good Time to Buy Amazon Stock?
2026-07-25 07:20
•John Ballard •The Motley Fool
••••• • Axe Capital view
Amazon's Cloud Surge: What It Means for JSE Investors
Amazon is growing fast with AI and cloud, but South Africans should anchor views on the rand and local banking stocks.
Amazon's latest surge feels impressive—its cloud arm AWS hitting $150 billion annualized revenue and AI infrastructure spending booming makes for a compelling growth story. Yet, it trades at a historically low valuation, signaling the market could be underestimating its pace. The catch for South African investors is direct access; Amazon isn’t listed locally, so the USD/ZAR exchange rate remains key. If the rand weakens, any gains in Amazon shares (if holding ADRs or US ETFs) get trimmed in rand terms. Meanwhile, strong global tech demand should support positive rand flows. Given tighter global monetary policy, local banks like Standard Bank and FirstRand could benefit from higher interest margins if credit demand holds up, providing a way to play rising US tech indirectly through a stronger rand and domestic financial exposure. Still, if global growth stalls or US inflation surprises on the upside, tech valuations and the rand could wobble, hurting returns. this is just my opinion and not financial advice
Watch USD/ZAR carefully; consider buying Standard Bank or FirstRand to benefit from both a potentially resilient rand and domestic rate hikes. Avoid direct Amazon exposure due to currency and market access risks.
- USD/ZAR
- Standard Bank
- US tech valuations correcting sharply
- Rand weakness against the dollar
6/10
Amazon stock has risen 90% over three years while fundamentals improved even faster. The company trades at its lowest valuation multiple in over a decade (18x cash flow, 30x earnings) despite strong growth in cloud services, AI infrastructure, and custom chips. AWS revenue reached $150 billion annualized with 28% YoY growth, while Amazon Bedrock spending nearly tripled quarter-over-quarter. The company's custom chips business is generating $20 billion in annualized revenue with triple-digit growth rates and $225 billion in revenue commitments.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: John Ballard
Categories: Equities, Earnings, Technology, AI, Semiconductors
Tickers: AMZN
Sentiment: Positive - Strong fundamental improvements with revenue and profitability growing faster than stock price appreciation. Trading at lowest valuation in over a decade while showing accelerating growth (9% to 17% YoY). AWS momentum driven by AI demand, Bedrock spending tripled, and custom chips business growing at triple-digit rates with major commitments from OpenAI and Anthropic. CEO indicates significant growth runway ahead.
Keywords: Amazon stock valuation, AWS cloud computing, AI infrastructure, Amazon Bedrock, custom chips, enterprise AI demand, cash flow growth
Insights:
- AMZN: Positive: Strong fundamental improvements with revenue and profitability growing faster than stock price appreciation. Trading at lowest valuation in over a decade while showing accelerating growth (9% to 17% YoY). AWS momentum driven by AI demand, Bedrock spending tripled, and custom chips business growing at triple-digit rates with major commitments from OpenAI and Anthropic. CEO indicates significant growth runway ahead.