Although Amazon has rallied in recent weeks, it’s still a solid buy, as the outlook for the business is strong and its valuation is still reasonable.<\/p>\n
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Image source: Getty Images. <\/p>\n
In the fourth quarter, AWS accounted for 50% of Amazon’s operating profits despite only making up 17% of total sales. Q4 is by far Amazon’s most profitable quarter for its commerce business, and most of the year looks like Q3, where AWS made up 66% of Amazon’s operating profits. Despite its much smaller size, AWS is a huge profit driver, and it looks to only keep accelerating that way.<\/p>\n
AWS posted 24% revenue growth during Q4 — its best in over three years. It’s doing so well that Amazon decided to spend a jaw-dropping $200 billion in capital expenditures<\/a> to increase its footprint dramatically. While some question that decision, Amazon noted in its shareholder letter that the faster AWS grows, the more it’ll spend. They noted that while spending is high, the long-term benefit to free cash flow is impressive. They also noted that they’re not blindly spending $200 billion; they have customers committed to using the space once it’s available.<\/p>\n That kind of language pretty much conveys that we’re going to see accelerating growth rates from AWS. Because AWS makes up the majority of Amazon’s profits, this will translate into rapidly rising profits as well. That’s a one-two punch that investors love to see, and it could send shares skyrocketing. However, over the past month, Amazon’s stock has risen nearly 20%. While it would have been better to invest a few weeks ago, the reality is that Amazon’s future is bright, and the price isn’t expensively valued.<\/p>\n For a company like Amazon, where the focus is on cash flow, 19 times operating cash flow isn’t a bad price tag to pay historically for the stock. It’s also far cheaper than some of its big tech peers like Apple\u00a0(29 times operating cash flow) and Alphabet (25 times operating cash flow).<\/p>\n As a result, investors haven’t missed the boat with Amazon, and now is still an opportune time to scoop up shares before AWS really catches fire and produces incredible growth<\/a>.<\/p>\n Ever feel like you missed the boat in buying the most successful stocks? Then you\u2019ll want to hear this.<\/p>\n On rare occasions, our expert team of analysts issues a \u201cDouble Down\u201d stock<\/a> recommendation\u00a0for companies that they think are about to pop. If you\u2019re worried you\u2019ve already missed your chance to invest, now is the best time to buy before it\u2019s too late. And the numbers speak for themselves:<\/p>\n Nvidia:\u00a0if you invested $1,000 when we doubled down in 2009,\u00a0you\u2019d have $523,131!*<\/p>\n Apple: if you invested $1,000 when we doubled down in 2008, you\u2019d have $51,457!*<\/p>\n Netflix: if you invested $1,000 when we doubled down in 2004, you\u2019d have $524,786!*<\/p>\n Right now, we\u2019re issuing \u201cDouble Down\u201d alerts for three incredible companies, available when you join\u00a0Stock Advisor, and there may not be another chance like this anytime soon.<\/p>\n See the 3 stocks \u00bb<\/a><\/p>\n *Stock Advisor returns as of April 13, 2026<\/p>\n Keithen Drury<\/a> has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, and Apple and is short shares of Apple. The Motley Fool has a disclosure policy<\/a>.<\/p>\n<\/a> AMZN Price to CFO Per Share (TTM)<\/a> data by YCharts<\/a> <\/p>\n