Amazon (AMZN) is being left out of the renewed interest in owning AI stocks.
Nvidia (NVDA) is trading at a record high. Rival AMD (AMD) just hit a record high. Microsoft (MSFT) and Google (GOOG) have tacked on modest gains in the past month. Meta (META) shares have surged 23% on Muse AI agent fever.
Contrast those gains with Amazon, which is down 2.4% over the past month. In fact, at its current stock price of $251 and trailing price-to-earnings (P/E) ratio of 20x, Amazon is trading at its lowest valuation ever as a public company, the team at TrendSpider pointed out.
Amazon has the second-lowest trailing P/E ratio among the “Magnificent Seven” names. Only Alphabet trails, at 17.7 times forward earnings, per Yahoo Finance AlphaSpace data.
There are a couple of factors likely holding Amazon stock back right now.
For starters, in early September, the Federal Trade Commission (FTC) and 22 states filed a lawsuit alleging that Amazon’s advertising practices have overcharged its roughly 1.2 million advertisers by $20 billion from 2019 to the present.
The FTC contended Amazon didn’t disclose reserve-pricing mechanisms that ultimately increased costs for advertisers and consumers.
Amazon responded by saying advertisers are receiving greater value from its platform.
Whatever the case, investors are taking a wait-and-see approach to Amazon shares, fearing that a lucrative profit center for Amazon — advertising — may become less lucrative in the future.
Lingering concerns about how much Big Tech is spending on AI infrastructure are also not helping Amazon’s stock.
Recall that in its second quarter earnings release, Amazon announced it is significantly expanding its full-year 2026 capital expenditures budget to approximately $220 billion.
And the aggressive spending is poised to continue, Wall Street says.
“We now estimate Amazon’s 2027 capex to be $320 billion, and its 2028 capex to be $370 billion. Accordingly, we now estimate negative free cash flow in 2027 and 2028 of approximately -$50 billion in each year,” Evercore ISI analyst Mark Mahaney warned.
Brian Sozzi is Yahoo Finance’s Executive Editor, host of the Sozzi Unleashed morning show and the Power Players with Brian Sozzi podcast, and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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