Amazon Trades at Lowest Valuation Ever as AI Rally Passes It By

Yahoo Finance·5 Oct 2026·

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Summary · why it matters

Amazon is trading at its lowest valuation ever as a public company, with its stock at $251 and a trailing price-to-earnings ratio of 20x, even as AI peers hit record highs. Nvidia and AMD have both reached record highs, Meta has surged 23% on Muse AI agent fever, and Microsoft and Google have posted modest gains over the past month, while Amazon is down 2.4% over that same stretch. Amazon now carries the second-lowest trailing P/E ratio among the Magnificent Seven, behind only Alphabet at 17.7 times forward earnings. Investors are taking a wait-and-see approach after the Federal Trade Commission and 22 states sued Amazon in early September, alleging its advertising practices overcharged roughly 1.2 million advertisers by $20 billion from 2019 to the present, a claim Amazon disputes. Lingering concerns about Big Tech AI infrastructure spending are also weighing on the stock, after Amazon said it is expanding its full-year 2026 capital expenditures budget to approximately $220 billion; Evercore ISI analyst Mark Mahaney estimates 2027 capex of $320 billion and 2028 capex of $370 billion, with negative free cash flow of roughly -$50 billion in each of those years.

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Amazon is expanding 2026 capex to ~$220 billion with estimates of negative free cash flow around -$50 billion in 2027-2028, fueling AI infrastructure spending concerns.