Amazon’s Billion-Dollar AI Bet Delivers Everything But Stock Gains
As markets handsomely reward bold AI spending sprees, the highest bidder finds itself oddly left out of the party. Up just 4.12% YTD, AmazonAMZN trails peers like MetaMETA and even the S&P 500, which have respectively minted 18.98% and 7.45% gains this year. Dubbed the “most under-appreciated GenAI beneficiary” by Morgan Stanley, the price disconnect raises questions.
- AMZN’s staggering $104B outlay this year leads the S&P 500 — heeding to its signature playbook of sacrificing short-term profits for long-term dominance that’s worked for decades.
- “The stock isn’t getting much credit for AI,” says a Janus Henderson portfolio manager — believing investors await proof of improved profits, which “will become more clear by the quarter.”
The patience play: While Wall Street fixates over web services growth, Amazon is building a “humanoid park” in San Francisco to train $16K delivery robots. Amid razor-thin retail margins, Bank of America estimates these mechanical workers could unlock $7B+ in annual savings by 2032, synergized with Amazon’s 2020 autonomous vehicle acquisition, Zoox. Ironically, this robot army arrives as founder Jeff Bezos dumps billions in stock. Maybe they can deliver the returns investors have been waiting for.