A glance at Amazon’s price-to-earnings ratio suggests the stock is among the cheapest large-cap technology names trading on the market today.
At roughly 21 times trailing earnings, Amazon (NASDAQ: AMZN) trades at a steep discount to the Nasdaq-100, whose P/E ratio currently sits at 30.2, making the e-commerce and cloud giant look like an obvious buy.
But that headline number deserves scrutiny, because more than $69 billion of Amazon’s $120.7 billion in pre-tax profit during the first half of 2026 came from paper gains tied to its Anthropic investment rather than core business operations.
Strip out those unrealized gains and the picture shifts considerably, with Wall Street forecasting that Amazon’s earnings per share could actually fall to $10.55 in 2027 from $12.44 over the past four quarters.
That backdrop makes the company’s upcoming third-quarter earnings release, scheduled for October 29, a particularly consequential moment for investors trying to assess the true health of the underlying business.
All attention will land on Amazon Web Services, the cloud computing division that sits at the center of the company’s artificial intelligence ambitions and drives the majority of its profitability.
AWS pulled in $42.2 billion in revenue during the second quarter of 2026, a 37% increase from the same period a year earlier, marking the fourth consecutive quarter of accelerating growth.
Demand is outpacing even that impressive expansion rate, with a customer order backlog of $496 billion as of June 30, a figure that surged by a triple-digit percentage year over year as enterprises scramble for data center capacity.
CEO Andy Jassy has signaled his long-range ambitions for the division are enormous, expressing confidence that AWS can eventually generate $1 trillion in annual revenue as AI adoption deepens across industries.
Beyond cloud computing, Amazon builds its own large language models and designs proprietary data center chips, positioning the company as a vertically integrated player across multiple layers of the AI technology stack.
The core e-commerce business is also contributing more meaningfully to the profit picture, having grown steadily more efficient and profitable over recent years, reducing Amazon’s dependence on any single revenue stream.
Broader market conditions add another layer of context, with analysts noting that strong corporate earnings are essential to sustaining the current bull market as macroeconomic risks continue to accumulate.
For investors with a horizon measured in years rather than months, Amazon’s combination of dominant cloud infrastructure, AI positioning, and expanding retail margins presents a compelling long-term case regardless of what any single quarterly report reveals.
The October 29 print will offer a cleaner read on operational momentum, but the most meaningful returns from owning AMZN shares are likely to materialize over the next five to ten years rather than the next few quarters.
