Jeff Bezos Built Amazon Into a $1.8 Trillion Company. Here's How Andy Jassy Is Making It Worth Even More.
Key Points
Amazon founder Jeff Bezos oversaw the company through a period of tremendous growth that rewarded shareholders.
Andy Jassy's background should continue to serve the company well.
Amazon's shares appear attractively valued.
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Jeff Bezos founded Amazon (NASDAQ: AMZN) in 1994 and served as its CEO until July 5, 2021. From the company's May 1997 initial public offering through the day he stepped aside, Amazon's market cap grew from under $500 million to $1.8 trillion. That's a remarkable record, and created immense wealth for patient shareholders.
Bezos' successor, Andy Jassy, has overseen a 50% increase in Amazon's market cap to $2.7 trillion. However, the company's current size shouldn't dissuade people from investing.
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Here's why Jassy should continue to oversee strong profit growth that drives further stock price gains.
Image source: Getty Images.
A big opportunity lies ahead
Before taking the CEO job, Jassy helped form and run Amazon Web Services. That business has become Amazon's largest profit generator, and should drive growth on the top and bottom lines for the foreseeable future.
AWS is the world's leading cloud-computing platform. Due to the amount of resources needed to build data centers in quantity, major competition in the cloud infrastructure sector remains fairly limited. As of the second quarter of 2026, AWS had a 28% market share, ahead of Microsoft's Azure (20%) and Alphabet's Google Cloud (15%). The remainder of the market is divided among a host of players with much smaller shares.
As organizations' demands for compute and data have risen rapidly in recent years, AWS has been growing fast. Its pace is set to accelerate with the widening use of generative artificial intelligence, which will further increase demand for AWS' products and services.
The division's finances have already benefited. AWS' sales grew 36.8% year over year to $42.2 billion in the second quarter. This drove operating income 63.6% higher to $16.6 billion. Most importantly, during the quarter, AWS accounted for 60.5% of Amazon's total operating profit.
An attractive valuation
With all the success that Amazon has had throughout the years, it's rare that the stock trades at an attractive valuation. But it is right now.
In line with the company's effort to meet surging demand for cloud computing capacity, Jassy and his team are boosting capital expenditures from $131.8 billion in 2025 to $220 billion this year. The steepness of that increase has some investors concerned about the payoff. However, given AWS' growth potential and the company's strong market position, the money it's pouring into data centers seems like a wise investment.
Amazon's price-to-earnings (P/E) ratio has dropped from 32 to 20 this year. That's cheap compared to its historical averages -- the stock has a five-year median P/E ratio of 50. The current valuation is also lower than the broader market's average, as the S&P 500 index's P/E multiple is 26.
With Jassy's knowledge of AWS, the big growth opportunity, and the company's attractive valuation, Amazon's shares seem poised for nice long-term growth. That should handsomely reward patient investors.
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Lawrence Rothman, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, and Microsoft. The Motley Fool has a disclosure policy.
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