Why Amazon.com (AMZN) is suddenly a logistics stock story too

Amazon.com (AMZN) has turned a logistics-focused corner with the launch of Amazon Supply Chain Services, opening its freight, distribution, fulfillment, and parcel network to external businesses in direct competition with UPS and FedEx.

The launch of Amazon Supply Chain Services comes amid strong recent interest in the stock, with a 30 day share price return of 28.55% and a 1 year total shareholder return of 44.96%. This points to building momentum after recent earnings, AI spending updates, and new enterprise wins in logistics and cloud.

If this logistics and AI story has your attention and you want more potential opportunities tied to the same theme, it could be worth scanning 38 AI infrastructure stocks

With Amazon trading around $273.55 after a 1 year total shareholder return of about 45%, a value score of 3 and an indicated 25% intrinsic discount, you have to ask: is there still a buying opportunity here, or is the market already pricing in future growth?

Most Popular Narrative: 39.2% Undervalued

Market pricing of $273.55 compared with a narrative fair value of $450 suggests a wide gap, and the narrative argues that current margins are not telling the full story.

Amazon is not underperforming. It is investing ahead of the curve.

The company is making disciplined, intelligent, long-term expenditures that temporarily suppress margins while dramatically expanding future earnings capacity. This is the same playbook Amazon has run for decades and the same playbook that has repeatedly rewarded patient investors.

Want to see what sits behind that $450 fair value? The narrative focuses on AI led AWS growth, rising advertising profits, and a richer margin mix. Curious which earnings and revenue paths are included in those expectations, and how they aim to justify that valuation gap?

Result: Fair Value of $450 (UNDERVALUED)

However, this hinges on AI and logistics investments scaling as planned, and any slowdown in AWS or ad demand could quickly challenge that $450 fair value story.

Another View: Earnings Multiple Sends a Different Signal

While the user narrative sees Amazon.com as materially undervalued, the P/E of 32.4x tells a tighter story. It sits above both the North American Multiline Retail average of 22.6x and the peer average of 27.6x, yet below a fair ratio of 41.5x that the market could move toward.

In practice, that means you are paying more than the sector and peer pack for each dollar of earnings today, but still at a discount to where the fair ratio suggests the P/E might settle. Is that a reasonable premium for Amazon.com’s earnings profile, or a margin of safety that could close?

Next Steps

Seeing mixed signals on value and growth potential here? Act quickly: look through the full set of risk and reward data, and weigh it against your own expectations with 3 key rewards and 1 important warning sign

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.