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6d ago

Amazon Falls Behind AI Trade With Shares at Rare Nasdaq 100 Discount

A market chasing pure AI exposure is penalizing Amazon’s slower AWS momentum.

FILE – An Amazon company logo marks the facade of a building, March 18, 2022, in Schoenefeld near Berlin. AP Photo/Michael Sohn, File)
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Amazon Shares

Overview

  • Amazon has underperformed the Nasdaq 100 this year, widening the gap after its July 31 earnings miss, with the index up about 12% versus Amazon’s roughly 4.6% gain.
  • AWS revenue rose 17% in the second quarter, far below Microsoft’s Azure at 39% and Google Cloud at 32%, prompting concerns about cloud share and execution.
  • The stock now trades near its largest recorded discount to the Nasdaq 100, at about 26 times forward earnings compared with more than 27 times for the index.
  • Investors have bid up perceived pure AI plays, with Oracle shares up nearly 50% this year after an OpenAI data center power deal and CoreWeave more than doubling since its March IPO.
  • Despite near‑term skepticism, more than 90% of covering analysts rate Amazon a buy, and the company continues to invest across businesses, including plans to more than double cities with same‑day grocery delivery.