Three Compelling Reasons Why Amazon Could Be One of the Stocks to Buy Right Now

Amazon had a disappointing year in 2025, with its stock rising just 5% compared to the S&P 500’s impressive 18% gain. However, this setback presents an intriguing moment for investors considering which stocks to buy. The recent market undervaluation of this e-commerce and cloud computing giant may have created a compelling buying opportunity worth examining.

E-Commerce Momentum: A Hidden Growth Engine

The fourth quarter traditionally captures the holiday shopping season, and 2025’s results paint an encouraging picture for Amazon shareholders. According to Visa’s preliminary data, holiday spending climbed 4.2% year-over-year, with e-commerce sales surging 7.8%—a notably stronger performance than traditional retail.

This matters significantly because Amazon controls approximately 40% of the U.S. e-commerce market. The 7.8% e-commerce growth rate signals what investors might expect from Amazon’s forthcoming quarterly earnings report. Even more importantly, physical retail accounted for 73% of total holiday spending, suggesting a massive untapped opportunity ahead. With digital commerce still accounting for less than 30% of total retail spending, Amazon has substantial room to capture additional market share—a crucial factor for investors evaluating which stocks to buy with long-term growth potential.

AWS and AI: The Real Long-Term Opportunity

The truly exciting part of Amazon’s investment thesis centers on its Amazon Web Services division and its artificial intelligence initiatives. As the world’s largest cloud provider with approximately 29% global market share, AWS has been accelerating at an impressive 20% year-over-year growth rate in 2025’s third quarter.

What makes this particularly significant is management’s aggressive positioning in AI. Amazon is investing approximately $125 billion annually in AI infrastructure—more than most other major hyperscalers—and plans to increase this commitment throughout 2026. As enterprises worldwide shift their operations to the cloud to access advanced AI capabilities, this creates a powerful tailwind for AWS expansion. CEO Andy Jassy has outlined a compelling vision: over the next 10-20 years, companies will fundamentally migrate their operations to cloud platforms where AI tools are readily available. This generational shift represents precisely the type of long-term growth catalyst that sophisticated investors look for when deciding which stocks to buy for their portfolios.

Valuation Presents an Attractive Entry Point

While Amazon performed well operationally, investor sentiment around its AI competitive positioning has resulted in a more moderate stock price. Currently, Amazon trades at a P/E ratio of 33—a multiple that might seem elevated in isolation but appears fairly valued when considering the company’s dominant market position and growth runway.

Compared to many of its technology peers, this valuation suggests the market has been somewhat skeptical about Amazon’s AI prospects relative to the competition. This skepticism may prove unfounded, particularly when examining the convergence of e-commerce strength, AWS acceleration, and the company’s substantial capital commitment to AI development.

The Bottom Line for Investors

For those actively researching which stocks to buy in early 2026, Amazon warrants serious consideration. The combination of near-term e-commerce tailwinds from holiday momentum, medium-term AWS growth acceleration, and an increasingly attractive valuation creates a multi-layered investment case.

Of course, every investment decision requires individual analysis and consideration of your specific financial situation. However, the current environment presents Amazon as a compelling candidate for investors seeking exposure to cloud infrastructure, AI adoption trends, and sustained e-commerce growth—making it worthy of a place on any thoughtful investor’s watch list of stocks to buy.