Amazon stock has underperformed the S&P 500 in the last five years, but its retail business is showing margin expansion. With the potential of AWS, investors could benefit in the next three years. North American sales grew 10% to $426 billion last quarter, with margins at 9%. AWS revenue grew 24% to $129 billion in 2025.

Investors are focusing on AI, but Amazon’s retail business is still strong. The company plans to spend $200 billion on AWS investments in 2026 for revenue growth. If AWS revenue grows to close to $250 billion with 30% profit margins, it could yield $75 billion in operating earnings.

Amazon’s potential for earnings growth makes it a good buy for investors through 2026. With combined operating earnings possibly reaching $150 billion, the stock is undervalued with a market cap of $2.2 trillion. Now could be the right time to invest in Amazon for long-term gains.

Considerations before buying Amazon stock: The Motley Fool Stock Advisor team identified the 10 best stocks for investors to buy now, and Amazon wasn’t one of them. The top 10 list has produced high returns in the past. Stock Advisor’s total average return is 884%, outperforming the S&P 500. Don’t miss out on the latest stock recommendations from Stock Advisor.

Read more at Nasdaq: Prediction: Amazon’s Falling Stock Will Fuel 2026 Gains