Prediction: 1 AI Stock Being Underrated by Wall Street That Could Be Worth More Than Nvidia in 2030

Amazon is presented as an undervalued AI investment poised to potentially surpass Nvidia in market capitalization by 2030, primarily due to anticipated acceleration in AWS revenue from its strategic partnership with Anthropic, including Anthropic's projected $5 billion ARR and joint development of custom AI chips to reduce reliance on Nvidia. Furthermore, AI integration in Amazon's e-commerce operations, from generative advertising to logistics automation, is expected to significantly boost North American retail profit margins. This confluence of factors could drive Amazon's consolidated revenue to $1 trillion with a 15% EBIT margin by 2030, potentially yielding greater earnings than Nvidia, whose growth may decelerate amid rising competition and semiconductor market dynamics.

Analysis

The analysis presents a long-term bullish thesis for Amazon (AMZN), framing it as an undervalued artificial intelligence beneficiary with a potential valuation path to surpass Nvidia (NVDA) by 2030. Despite recent stock underperformance relative to NVDA (57% vs. 1,350% over five years) and slower AWS revenue growth (17% YoY) compared to competitors like Microsoft Azure and Google Cloud (over 30%), a key catalyst is identified in the strategic partnership with AI startup Anthropic. This collaboration is expected to re-accelerate AWS growth, driven by Anthropic's rapid revenue trajectory, which is projected to hit $5 billion in Annual Recurring Revenue. Furthermore, Amazon is strategically mitigating its reliance on Nvidia and boosting its own profitability by co-developing custom 'Trainium' chips, which are designed to lower costs for AWS and directly compete in the AI hardware market. Beyond cloud services, the thesis highlights significant, underappreciated AI-driven margin expansion opportunities within Amazon's e-commerce division. With current North American retail profit margins at just 7.5%, initiatives like generative AI for advertising and robotics in logistics are expected to drive profitability. The analysis culminates in a projection where Amazon's revenue could reach $1 trillion with a 15% EBIT margin by 2030, generating $150 billion in EBIT—an amount anticipated to exceed that of Nvidia, whose earnings growth may decelerate due to increasing competition and market cyclicality.

Key Decisions for Investors

• Investors with a long-term horizon could consider Amazon as a relative value and growth-at-a-reasonable-price play in the AI sector, given its stock underperformance compared to Nvidia and its multi-faceted growth drivers.
• Closely monitor AWS quarterly revenue growth for signs of acceleration, as this is a critical validation point for the thesis that the Anthropic partnership is successfully offsetting the division's recent slowdown.
• Scrutinize Amazon's operating margins, particularly in the North American retail segment, for evidence that AI-driven efficiencies and advertising growth are leading to the projected profitability expansion.
• Acknowledge the risk that a failure of the Anthropic partnership to deliver substantial revenue or delays in the Trainium chip development could weaken the primary catalysts for Amazon's re-acceleration and challenge the bullish outlook.