Forget D-Wave Quantum: This "Magnificent Seven" Icon Is the Cloud Play Worth Your Money

Aside from Google (through its parent company Alphabet), I'm willing to bet that Amazon (NASDAQ: AMZN) is the "Magnificent Seven" company you interact with most. It's the storefront for, well, everything. If you can think of it, you can probably buy it on Amazon and have it at on your doorstep by tomorrow.

Jeff Bezos' brainchild has come very far from the online bookstore it was founded as originally. Today, Amazon is far more than a storefront. It's a leader in cloud services, and through that cloud it's a leader in quantum computing infrastructure, artificial intelligence (AI), and more.

Yet, despite everything Amazon has going for it, its latest earnings were something of a mixed bag and caused its share price to tumble. So, should you buy the dip? Read on and I'll tell you.

Image source: Getty Images.

The everything company

I won't go into Amazon's store business because we've likely all interacted with it at least once. Instead, I want to focus on Amazon Web Services, or AWS.

AWS is Amazon's cloud-based computer infrastructure network. It's the most widely adopted cloud system in the world and offers everything from compute and storage to developer tools and security.

In all, AWS comprises 18% of Amazon's net sales over the past 12 months. It's also the company's fastest-growing revenue segment by a considerable margin. As of Amazon's fourth-quarter 2025 results, its North American segment sales were up 10%, its international sales were up 17%, and its AWS sales were up 24%.

And AWS now offers quantum computing services through its Amazon Braket service. Braket allows a user to access quantum computing without having to purchase and maintain a quantum computer of their own. Which is good, because an industrial-grade quantum computer will run you about $10 million or more just for the machine. Maintaining it is even harder as quantum computers need a vacuum and near-absolute-zero temperatures to function optimally.

But Braket lets you access quantum computers hooked up to the cloud from D-Wave Quantum's main rivals, namely IonQ, and Rigetti. And because the AWS Cloud is the most widely used, it behooves quantum companies to use it to sell their services. That essentially allows Amazon to operate as the digital landlord of the quantum computing industry.

You can access the power of quantum computing without shelling out millions of dollars to buy and maintain your own, you just need to pay and go through Amazon to do it. And that's set to become a big market. McKinsey projects the quantum computing market alone could be worth as much as $72 billion by 2035.

Amazon is shaping up to be one of the best ways to play it as you can simultaneously profit from numerous smaller quantum companies using the AWS Cloud while enjoying the safety of holding shares in Amazon.

Now, on to Amazon's recent dip.

The river's not drying up anytime soon

Amazon is down 15% over the past week, most notably due to an 8% drop when it released its Q4 and full-year 2025 earnings and it missed Wall Street's estimate by $0.10 per share. However, despite that, its earnings per share (EPS) actually grew almost 30%, up considerably from 2024.

Other highlights for 2025 include 12% net sales growth over 2024, operating income growth of 16% year over year, and operating cash flow increasing by 20%.

It wasn't all sunshine and rainbows though. Free cash flow fell $11.2 billion primarily due to higher capital expenses from purchases of property and equipment.

Related to that point, the most concerning thing in Amazon's latest results was the company's $200 billion capital expenditure (capex) projection for 2026. It's $50 billion above analyst expectations and up $69 billion from 2025 levels.

The reason is the same as why Alphabet and Meta Platforms projected ballooning capex projections for 2026: data centers. The infrastructure needed to run AI and the cloud is not cheap.

However, of all companies, I'm not worried about Amazon not being able to afford it. It's an investment at the end of the day, one Amazon is clearly comfortable making because its leadership thinks it will pay off.

The company remains incredibly profitable with an operating margin of 11.7%, which it has maintained for five of the past six quarters with one exception in Q3 2025. Still, it's worth keeping an eye on and I hope Amazon can rein in the spending a bit in the future.

So, Amazon is still growing plenty fast, just not as dramatically fast as Wall Street would have liked to see. It's still an incredibly strong stock in terms of fundamentals though, and because of that I think its recent dip is superficial. Give Amazon a look if you're interested in buying a fundamentally strong company at a discount.

James Hires has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Amazon, IonQ, and Meta Platforms. The Motley Fool has a disclosure policy.