Is Now a Good Time to Buy Amazon Stock?
Key Points
Amazon's cash from operations has more than tripled since 2022, while the market values the stock at a lower multiple of that cash flow.
Revenue from Amazon Web Services and e-commerce accelerated in the second quarter.
- These 10 stocks could mint the next wave of millionaires ›
The share price of Amazon (NASDAQ: AMZN) has nearly doubled over the past three years, but is only up about 12% year to date at the time of writing -- performing roughly in line with the S&P 500.
However, the company's year-to-date performance doesn't reflect its surging cash flow and growth in cloud services. This disconnect suggests now might be a good time to buy shares.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Image source: The Motley Fool.
Amazon's trailing-12-month cash from operations surged to $161 billion in the second quarter. That has been growing faster than the share price, pushing the stock's price-to-cash flow multiple down to about 17.
Amazon stock traded at a 25x cash flow multiple, or higher, before the 2022 bear market. It hasn't returned to those higher cash-flow multiples, despite cash from operations increasing by 245% over that period, driven by lower costs from warehouse automation as well as growth in its cloud computing business.
Amazon Web Services (AWS) is the company's largest profit contributor, and its revenue is accelerating in 2026. AWS revenue climbed 37% year over year in the second quarter (excluding currency changes).
Further growth from AWS should translate into higher cash flow over time. Customers already run massive amounts of data and applications on AWS, making Amazon a key beneficiary as demand for AI cloud services grows.
With the core e-commerce business also accelerating, up 15% year over year in Q2, I believe now is a good time to buy Amazon stock. Investors are getting better value for the shares just as Amazon is seeing accelerating demand in its two largest businesses -- online retail and cloud computing.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
- Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $573,341!*
- Apple: if you invested $1,000 when we doubled down in 2008, you’d have $60,441!*
- Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $437,097!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.
See the 3 stocks »
*Stock Advisor returns as of September 2, 2026.
John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
Recommended Articles
