Is Amazon Really the Best Forever Stock for Your Portfolio?
Tech giant Amazon.com Inc (NASDAQ: AMZN) has been in full breakout mode since April’s low, and the chart says it’s not done yet. Shares are up nearly 40% from that bottom and are now closing in on February’s all-time high.
The good news for those of us on the sidelines is that all signs point to the rally having a lot of room to run yet, and to Amazon being a candidate for one of the better long-term buys.
A solid stretch of fundamental performance has underpinned the current move north. Amazon has beaten analyst expectations across multiple quarters, and the latest earnings report in May showed strong growth in its AWS segment and overall operating profit.
Forward guidance was soft, but the market easily shook it off. Wall Street liked what it saw and was happy to buy into the setup.
Amazon is approaching a potential inflection point, with its next earnings report due at the end of July. Expectations are high, and the company must deliver another solid print to justify the move. But for long-term investors, the momentum is hard to ignore.
Valuation Supports the Long-Term Bull Case
One of the more under-appreciated elements of Amazon’s current setup is how attractive its valuation has quietly become. The stock’s price-to-earnings (P/E) ratio now sits at just 36, a far cry from where it’s traded in recent years.
For example, this time last year, Amazon’s P/E was hovering around 46. Two years ago, it was more than 100. That compression alone makes the stock far more compelling for long-term investors looking to start or build a core position.
Amazon is still growing at a healthy clip, especially across its most profitable verticals like AWS. When you factor in the improving margins and earnings momentum, that multiple starts to look much more reasonable, especially compared to other mega-caps that haven’t expanded at quite the same pace.
Wall Street’s Still All In
The other reason to be extra bullish on Amazon’s long-term potential is analyst sentiment, which continues to run hot.
This week, Cantor Fitzgerald and Jefferies both reiterated their Buy ratings on the stock, with price targets boosted as high as $265.
From where shares closed on Wednesday night, that points to a potential upside of almost 20%, not bad for a $2.4 trillion company.
That would not only take Amazon well above its previous all-time high but also confirm the stock’s position as one of the few tech giants still in breakout territory with valuation support behind it.
Solid Core, But Watch the Next Print
All that being said, as strong as the setup looks right now, Amazon’s next earnings report, due at the end of July, will be critical. The stock has now logged several months of heavy buying, and any cracks in the numbers, particularly around AWS or management’s forward guidance, would likely spook investors.
AWS remains the business's crown jewel. It played a major role in driving profit beats in May earnings and op. But sentiment could shift quickly if growth slows or commentary on enterprise spending softens.
That said, Amazon has navigated rougher quarters before. Its scale, product stickiness, and global reach continue to provide ample downside protection, especially for investors with a multi-year time horizon.
Built to Hold, Not to Trade
The case for Amazon as a buy-and-hold-forever stock is stronger now than it’s been in a long time. It dominates across multiple high-margin verticals, has the infrastructure and talent to keep innovating, and trades at what feels like a very reasonable valuation right now.
Amazon belongs at the top of the list for long-term investors who are building a core tech allocation. The current rally may have room to run, but what’s under the hood makes this setup compelling.
Those of us getting involved now are not just buying ahead of a fresh post-earnings breakout—we’re building a position in a tech giant that’s positioned to break out into the next decade.
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