Amazon’s cloud computing division is growing rapidly, but the stock may be undervalued. Despite underperforming stock market indexes, AWS revenue accelerated to $33 billion last quarter. E-commerce sales also rose to over $100 billion in North America. With a P/E ratio of 31, Amazon’s stock is seen as a good buy for 2026.

AWS revenue growth accelerated to 20% year over year, hitting $33 billion. The division has a strong relationship with Anthropic, a startup spending billions on computing power. Despite competition, AWS remains highly profitable for Amazon. E-commerce sales continue to grow steadily, contributing to Amazon’s overall success in different sectors.

Investors are focused on AI and cloud computing, but Amazon’s e-commerce business is thriving. North American retail sales surpassed $100 billion last quarter, with advertising, seller services, and subscription revenue totaling almost $300 billion annually. Despite a 6.6% operating margin in 2025, there is room for margin expansion in the future.

Amazon’s stock trades at a P/E ratio of 31 and shows potential for revenue and margin growth in the coming years. With an expected revenue increase to $919 billion and operating margin rising to 15%, Amazon’s operating earnings could reach $138 billion by 2026. This makes the stock a solid buy for long-term investors.

Consideration should be given before buying Amazon stock, as other investment opportunities may offer higher returns. The Motley Fool’s Stock Advisor team identified 10 stocks with potential for significant growth. Amazon’s stock may not be included in this list, so investors should weigh their options carefully before making a decision.

Read more at Nasdaq: Should You Buy Amazon Stock in 2026?