Should You Buy Amazon Stock, Even Though It Has Badly Underperformed the S&P 500 and Nasdaq-100 Since Jeff Bezos Stepped Down as CEO?

AMZN’s setup is less about “cheap growth” and more about whether cloud capex is finally converting into durable free cash flow. The market has punished the stock for years because it saw spend first and monetization later; if AWS can hold mid/high-20s growth for another 2-3 quarters, the multiple gap versus MSFT should narrow quickly. The biggest second-order beneficiary is the AI infrastructure supply chain: continued data-center expansion supports demand for power, networking, and accelerators even if Amazon increasingly substitutes toward its own silicon.

The competitive read-through is more interesting than the stock-specific story. If Trainium becomes meaningfully adopted, it is a margin-defense tool for AMZN and a pricing threat to NVDA over a 6-18 month horizon, but near term the buildout still likely absorbs more third-party chips and networking gear. GOOG and MSFT face a different risk: if AWS re-accelerates while trading at a discount multiple, they lose the ability to frame cloud as a relative growth advantage, which can compress their premium valuations even without any absolute slowdown.

The key risk is that backlog is not the same as revenue, and the current narrative assumes conversion with little cancellation/slippage. If AWS growth rolls over below ~20% or capex intensity stays elevated without margin expansion, the stock can de-rate back toward a low-20s forward P/E. Consensus may be missing that the rerating can happen before earnings inflect, but it can also reverse fast if management sounds less confident on utilization or customer concentration.