This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
Tech stocks have driven the bulk of market gains over the past two decades, fueled by relentless innovation and digital transformation. But as investors continue to bid up the usual suspects, truly compelling value opportunities have become increasingly scarce in the big tech arena.
Amazon (NASDAQ: AMZN), however, remains a notable exception. Despite robust business fundamentals, the stock has underperformed in 2025, falling 6.3% year to date. That disconnect presents a compelling opportunity. Here are three reasons Amazon stock looks like a rare bargain at current levels.
Reason 1: Amazon Web Services is still a cash machine, and growing fast
Amazon Web Services (AWS) continues to be the company's main profit engine. In Q1 2025, AWS posted revenue of $29.3 billion, up 17% year over year, and generated $11.5 billion in operating income -- far surpassing the profitability of Amazon's other operating segments.
AWS holds roughly 30% of the global cloud infrastructure market, ahead of Microsoft Azure, at around 21%, and Alphabet's Google Cloud, at about 12%. That dominant position, coupled with enterprise demand for artificial intelligence (AI) and machine learning workloads, provides Amazon with high-margin, recurring revenue that's only accelerating.
Best of all, CEO Andy Jassy recently noted that AI-related workloads on AWS are growing at triple-digit rates, driven by companies deploying generative AI tools and large language models across every industry vertical. That's a massive opportunity for savvy investors.
Reason 2: Robotics is reshaping the economics of fulfillment
Amazon has quietly become a global leader in automation. More than 750,000 robots now operate within its fulfillment network, from mobile drive units that move shelves to advanced systems such as Sparrow and Cardinal that handle complex sorting tasks.
The latest robotic fulfillment centers process orders roughly 25% faster and cut the cost to serve by about 25%, particularly during peak shopping periods. As of this year, around 75% of Amazon customer orders involve some form of robotic assistance.
Analysts at Morgan Stanley estimate that warehouse automation could yield $10 billion in annual cost savings by 2030 for the e-commerce giant. With a decade-long lead and full-stack robotics integration, Amazon is building a logistics moat its rivals will struggle to match.
Reason 3: It has early leadership in quantum computing
Amazon's investment in quantum computing remains under the radar, but it could ultimately prove to be one of its most transformative bets. Through AWS Braket, Amazon has created a unified platform that allows researchers and developers to access quantum hardware from multiple providers, run hybrid quantum-classical algorithms, and simulate quantum environments, all within the familiar AWS cloud ecosystem.
This isn't just a sandbox for academics. Braket is actively being used by Fortune 500 companies and government agencies exploring next-generation use cases in drug discovery, logistics optimization, materials science, and quantum encryption. By embedding quantum tools directly into its existing cloud infrastructure, Amazon ensures that as the technology matures, AWS customers will already be in a position to integrate it seamlessly into real-world applications.
Although widespread quantum utility is still years away, Amazon's early investment and infrastructure advantage could make it the dominant provider once the field crosses into commercial viability. Much as AWS quietly captured the cloud market a decade ago, Amazon is laying the groundwork now to lead in quantum when the moment arrives.
The investment case for Amazon
Amazon offers a rare blend of growth, scale, and long-term optionality. AWS alone supports a premium valuation, but the company's robotics and automation strategy is rewriting the economics of its core business. Meanwhile, strategic bets on emerging technologies such as quantum computing and satellite broadband (by way of Project Kuiper) create optionality that few peers can match. Despite these strengths, Amazon stock trades at just 31.8 times forward earnings, an attractive entry point for investors seeking durable growth at a reasonable price.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
