History Says You'll Regret Not Buying Amazon Stock

Amazon's (NASDAQ: AMZN) stock performance hasn't been inspiring lately. Its gains have lagged well behind those of the S&P 500 (SNPINDEX: ^GSPC) over the last 12 months. Amazon remains in correction territory, with its shares around 16% below their fourth-quarter 2025 peak.

Should investors stay away from this lackluster stock? I don't think so. Amazon has survived and thrived despite adversity, from the dot-com bubble to recessions to the COVID-19 pandemic. Every pullback has created a tremendous buying opportunity. Will history repeat itself?

Image source: Amazon.

E-commerce and beyond

Amazon ranks as the world's largest consumer discretionary company by market cap. It continues to dominate the e-commerce market but still has room to grow.

One reason why no e-commerce rival can keep up with Amazon is its relentless focus on improving operations. The company has consistently increased delivery speeds in recent years and delivered almost 70% more items on the same day in the U.S. in 2025 than it did in 2024.

Amazon has harnessed technology to improve service and efficiency. For example, over 300 million customers used its Rufus agentic AI shopping assistant last year. The company believes that Rufus helped boost annual sales by nearly $12 billion.

The e-commerce platform also serves as a core foundation for one of Amazon's most important new growth areas -- advertising. Sponsored products advertising on Amazon.com generates the greatest ad revenue. Amazon's Prime Video ad sales are also increasing robustly, with millions of viewers tuning into the streaming service for programs such as Thursday Night Football and NBA on Prime.

Overall, Amazon Ads now has an annual revenue run rate of $85 billion. Ad sales jumped 22% year over year in the fourth quarter of 2025.

A key backbone of the AI boom

However, Amazon isn't only a consumer discretionary stock; it's also one of the top AI stocks. Amazon Web Services (AWS) remains the No. 1 cloud service provider with a global market share of 28% to 30%.

In Q4, AWS' revenue soared 24% year over year to $35.6 billion. Sure, other cloud platforms are growing even faster. But Amazon CEO Andy Jassy correctly observed in the Q4 earnings call that "it's very different having 24% year-over-year growth on a $142 billion annualized run rate than to have a higher percentage growth on a meaningfully smaller base, which is the case with our competitors."

AWS is addressing the greatest obstacle to sustained AI growth by developing its own chips. Its Trainium 2 chips offer 30% to 40% better price performance than comparable GPUs. The recently launched Trainium 3 chips are up to 40% more cost-effective than Trainium 2 chips. And the company is hard at work developing even more powerful Trainium 4 technology.

Perhaps the best indication of AWS' continued growth prospects is its backlog. Jassy revealed in the Q4 call that the backlog totaled $244 billion at the end of 2025, up 40% year over year and around 22% sequentially. He also recently told employees that AWS could generate annual sales of $600 billion within the next 10 years. That amount is roughly 83% of Amazon's total revenue in 2025.

Is this time different for Amazon?

Amazon's double-digit percentage pullbacks have always been great buying opportunities. Is this time different? I don't think so.

Granted, Amazon's e-commerce business is more mature than it was 10 years ago. However, the company believes that it's only in the early innings of capitalizing on the massive AI opportunity. New initiatives, such as the satellite internet service planned to launch later this year, should provide additional growth.

History says you'll regret buying Amazon stock. I think history is right.

Keith Speights has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.