Amazon: Don’t Let The Forward P/E Fool You – The Stock Is Still Cheap

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1 week ago

**Amazon: Don’t Let The Forward P/E Fool You — The Stock Is Still Cheap**
*The J Thesis | 885 Followers*

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Amazon.com, Inc. is a dominant force in e-commerce and cloud computing, boasting a market capitalization of approximately $2.6 trillion. The company has consistently outperformed the benchmark, driven by AI-enhanced demand, robust top- and bottom-line growth, a strong balance sheet, and a significant competitive moat supported by a loyal customer base.

Despite a forward Price-to-Earnings (P/E) ratio of 35x, Amazon’s stock could still be undervalued if its growth trajectory continues. This supports a *Strong Buy* rating and a $300 price target, implying a potential upside of 21%.

### Key Strengths of Amazon (AMZN)

– **AI-Driven Demand:** Amazon benefits from rising adoption of artificial intelligence, boosting its core segments.
– **Rapid Growth:** Both revenue and earnings are growing swiftly.
– **Robust Balance Sheet:** The company maintains a strong financial position, supporting ongoing investments.
– **Competitive Moat:** Amazon enjoys significant market share with a sticky customer base across e-commerce and AWS.
– **Diversified Business Model:** While the market is heavily concentrated in the “Magnificent 7” tech stocks, Amazon’s diversified revenue streams and premium margins add resilience.

### Potential Risks

– **Market Concentration:** High exposure to large tech companies could pose a risk if sector rotation occurs.
– **Broader Market Pullback:** A general market downturn could impact performance.

However, Amazon’s diversified operations and industry leadership provide solid support for its positive outlook.

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### About the Author

Dear Reader,

I am a Senior Derivatives Expert with over 10 years of experience in asset management, specializing in equity analysis, macroeconomics, and risk-managed portfolio construction. My background includes working with both institutional and private clients, focusing primarily on equities and derivatives.

My passion lies in understanding how macroeconomic trends influence asset prices and investor behavior. I closely track EU and US central bank policies, sector rotations, and market sentiment to build actionable investment strategies.

I hold a BA in Financial Economics and an MA in Financial Markets. Over the past decade, I have navigated various market environments, which has strengthened my analytical approach.

One of my key goals in writing on Seeking Alpha is to share insights, exchange ideas, and help fellow investors grow more confident in long-term investing. I sincerely believe that investing should be accessible, inspiring, and empowering.

Please note, the analysis and opinions expressed are for informational purposes only and should not be considered financial advice. Always conduct your own research before making investment decisions.

Thank you, and have a lovely day!

Best regards,
*The J Thesis*

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### Analyst’s Disclosure

I/we have a beneficial long position in AMZN shares, either through stock ownership, options, or other derivatives. I wrote this article myself, and it reflects my own opinions. I am not receiving any compensation other than from Seeking Alpha. I have no business relationship with any company mentioned.

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### Seeking Alpha’s Disclosure

Past performance is no guarantee of future results. No recommendation or advice is given as to whether any investment is suitable for any investor. Views expressed may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker, US investment adviser, or investment bank. Our analysts include both professional and individual investors who may not be licensed or certified.

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