We just covered the
10 Best AI Stock Picks of Motley Fool Asset Management. Amazon.com Inc (NASDAQ:AMZN) ranks #5 (see the 5 Best AI Stock Picks of Motley Fool Asset Management).
Motley Fool Asset Management’s Stake: $113.64 Million
AMZN shares are up 45% over the past year. But does the stock have more room to run?
Cloud remains the biggest long-term catalyst for Amazon. It has a roughly 30–32% share of the global cloud infrastructure market, ahead of Microsoft and Google. The Cloud business generates operating margins estimated at around 30%, significantly higher than traditional retail margins.
As companies deploy AI applications at scale, they need reliable Cloud solutions, and that’s where Amazon can benefit. How? AWS has a strong moat because of the reliability and scalability it provides to large corporations. It benefits from high switching costs and long-term contracts, as migrating enterprise systems can cost millions and take years, helping maintain stable recurring revenue.
AWS ecosystem of services is another strong business moat. Unlike Microsoft Azure and Google Cloud, AWS offers 240+ cloud services, allowing companies to build, train and deploy AI models, store data, run applications and manage cybersecurity within one platform, increasing switching costs and strengthening customer lock-in over time.
E-commerce and ads are strong growth fundamental catalysts for the stock. Amazon.com Inc (NASDAQ:AMZN) controls roughly 40% of U.S. e-commerce, which gives the company access to consumer purchase data. This creates a goldmine for advertisers to target users, and Amazon.com Inc (NASDAQ:AMZN) is tapping into that opportunity. Amazon’s ad segment has been growing around 20% annually in recent years and already generates tens of billions in yearly revenue, making it one of the largest digital advertising platforms behind Google and Meta.
TCW Relative Value Large Cap Fund stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its fourth quarter 2025 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) is a $2.3 trillion internet company headquartered in Seattle, WA. The investment catalyst is new products/markets. AWS has been less impacted by the wave of AI spending than its hyperscale peers as they have …” (Click Here To Read The Letter in Detail)
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While we acknowledge the potential of AMZN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
