In 2025, Amazon shareholders were disappointed despite strong growth in its cloud computing unit, AWS. The stock only gained 5% due to its high valuation, trading at 44 times forward earnings. However, AWS accounted for 66% of operating profits in Q3, with revenue growing by 20% year over year.

AWS’ growth is reaccelerating, making it a crucial part of Amazon’s business. Despite only contributing 18% to total sales, it accounts for the majority of profits with a 35% operating margin. AWS revenue increased by 20% in Q3, showing promise for a successful 2026 for Amazon.

Amazon’s stock now trades for 29 times forward earnings, aligning it with other big tech peers. This presents a buying opportunity, especially with AWS driving profits. Analysts believe Amazon could succeed in 2026, thanks to its dominant cloud computing business and improved valuation.

Consideration should be given before buying Amazon stock, as the Motley Fool Stock Advisor team identified 10 other stocks with potential for greater returns. Their top 10 list has historically outperformed the S&P 500, offering a community of individual investors for investment opportunities.

Read more at Nasdaq: My 2025 Amazon Investment Prediction Was Early, But Now Is a Genius Time to Buy the Stock