Amazon is the most misunderstood company going into 2026.

The company’s underlying valuation has declined consistently over the past 5 years and is now trading at a significant discount relative to other AI hyper-scalers.

But under the hood, Amazon’s all high-margin businesses are growing rapidly.

Amazon Advertising: Is now a $60B business growing at 23% YoY (faster than Meta & Google)

Amazon Third Party: Latest earnings reports indicate that Amazon is now focusing on third-party (3P) e-commerce, which yields higher margins.

Amazon Web Services: The elephant in the room — AWS is critical to Amazon, and they have showcased impressive progress on their custom silicon program (Trainium 3), and we expect rapid adoption given its cost advantage. The recent quarter's results, in which AWS growth accelerated to ~20% YoY from 17.5% last year, are a sign of things to come.

Finally, given the diversity of its revenue streams, Amazon stands to lose the least in the event of an AI slowdown.

A classic Heads I Win, Tails I Don’t Lose (Much)!