Amazon Stock: Time to Bail or Time to Buy?

By Brett Schafer – Mar 25, 2026 at 6:57AM ESTKey PointsAmazon is investing heavily to capture the growing demand for AI infrastructure services. It should be able to grow revenue steadily over the next decade, along with rising profit margins. The stock looks cheap and a good value for any investor buying today with a time horizon of a decade. The S&P 500 index is still close to all-time highs, despite current geopolitical upheaval. However, under the hood, there has been significant pain for investors not invested in the hottest artificial intelligence (AI) stocks over the last few years. Even Amazon (AMZN 1.45%) has significantly underperformed the index over the last five years, despite benefiting from the AI boom. With the stock stuck around $200 -- close to where it traded in 2021 -- investors are likely growing impatient with the e-commerce and cloud computing giant. Is it time to bail on Amazon? Or is now the perfect time to buy the stock for your portfolio? Image source: Amazon. Tremendous AI demand, margin expansion AI demand has lifted all players in the cloud computing space, including Amazon.

Amazon Web Services (AWS) saw 24% revenue growth last quarter and will likely see accelerating growth in the year ahead. Over the next decade, Amazon management believes AWS can grow from $129 billion in revenue to $600 billion by 2036, an impressive feat for the massive infrastructure player. Investors are nervous about Amazon's heavy investments that are hurting cash flow today. However, these have historically led to strong returns on investment and should help Amazon's earnings grow significantly in the years ahead. What's more, Amazon's retail division is running smoothly right now. It grew revenue by 10% year over year in North America last quarter and has profit margins of 6.9% over the last 12 months, with plenty of room for continued expansion. Advertising revenue, third-party seller services, and subscriptions are growing quickly, with all three offering high margins that should improve Amazon retail's overall profit picture. ExpandNASDAQ: AMZNAmazonToday's Change(-1.45%) $-3.04Current Price$207.10Key Data PointsMarket Cap$2.2TDay's Range$206.68 - $209.3052wk Range$161.38 - $258.60Volume29KAvg Vol49MGross Margin50.29% Is the stock cheap? Combining the margin expansion story with the massive revenue opportunity at AWS, it becomes clear that Amazon has a nice earnings growth story for the next decade. AWS is becoming a larger piece of the pie and has fantastic operating margins of 35%, which are much better than the retail division. Revenue of $638 billion last year could grow to $1 trillion or more within a few years' time, with plenty of room to expand to an even larger base over the next decade. Right now, Amazon's consolidated operating margin is 11.8%, a record high. If that figure can expand to 15% while revenue grows to $1 trillion, Amazon will be generating $150 billion in operating earnings a few years down the line. Given its market capitalization of $2.2 trillion, Amazon's stock looks like a good value. Stay patient with this stock; long-term investors will be rewarded by holding Amazon over the next decade.Read NextMar 25, 2026 •By Sean Williams55% of Billionaire Bill Ackman's Portfolio Is Invested in 4 Preeminent AI StocksMar 24, 2026 •By Brett SchaferIs Amazon Actually a Once-in-a-Decade Bargain Stock Right Now?Mar 24, 2026 •By Anthony Di Pizio20.4% of Berkshire Hathaway's $306 Billion Portfolio Is Invested in 3 Artificial Intelligence (AI) StocksMar 24, 2026 •By Sean WilliamsThis "Magnificent Seven" Stock Is Historically Cheap and Begging to Be Bought (Hint: It's Not Nvidia)Mar 24, 2026 •By Brett SchaferAmazon Stock at a Crossroads: Generational Buy or Massive Value Trap?Mar 23, 2026 •By David Jagielski, CPAAmazon Expects AWS Annual Revenue to Hit $600 Billion in 10 Years.

The Stock Looks Like a Dirt Cheap BuyAbout the AuthorBrett Schafer is a contributing Motley Fool stock market analyst covering consumer goods, financials, technology, and industrials. Brett is a self-taught investor and has hosted the Chit Chat Stocks podcast since 2018. He previously worked as a lab engineer for science laboratories. He holds a bachelor’s degree in mechanical engineering with minors in finance and mathematics from Washington State University. His lab work on Major League Baseball’s juiced ball problem was featured in The Wall Street Journal and other national outlets.TMFBrettSchaferX@CCM_BrettStocks MentionedAmazonNASDAQ: AMZN$207.10(-1.45%)-$3.04*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.