Is Amazon (AMZN) a Buy, Hold or Sell?

Amazon — our independent, AI-built valuation and rating, in brief.

SELL (reduce into strength)

12-mo fair value

$230.00

To fair value

−8%

By José Luis Pascual, CFA · report dated 2026-08-02 · fair value derived independently of the market price.

The thesis, in brief

AWS's acceleration is real but the market is capitalising it at a pre-AI cost of capital — with 2026 capex guided to $220bn, TTM FCF at −$11.6bn, ROIC down from 19.1% (FY24) to 14.4%, and normalized (ex-$79.9bn investment marks) TTM EPS of $6.75 putting the true multiple at 40x not the screened 22x, a 10.25% WACC DCF supports only ~$230; we are wrong if Amazon guides 2027 capex to ≤$250bn while holding AWS growth above 35%, which would inflect FCF positive by 2028 and justify $300+

How we value it

We value Amazon using 10-yr FCFF DCF at 10.25% proprietary WACC (primary, probability-weighted bear/base/bull $118/$221/$271 + ~$13 unmodelled optionality); cross-checked against justified ~21x FY27E normalized EPS of $10.03. The 12-month fair value is set from that intrinsic estimate first, then compared to the market to read the upside or downside — never anchored to the current price.

What the full report covers

Business & moat + industry cycle
Earnings quality & normalized EPS
Returns on capital (ROIC vs WACC)
Balance-sheet safety
Two independent valuations (DCF + multiples)
Bear / base / bull fair values
Earnings-call analysis
Insider activity & positioning
Technicals (RSI / ADX)
A falsifiable thesis

Read the full Amazon report

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