This is One of the Cheapest Magnificent Seven Stocks Right Now

Amazon (AMZN) is currently considered one of the most affordable options among the Magnificent Seven stocks, with a forward P/E ratio of 23, between Alphabet's 17 and Microsoft's 24. Analysts predict that Amazon's cloud computing division, AWS, could reach a trillion-dollar revenue stream over time, driven by its rapid growth and AI monetization potential.

In the second quarter of fiscal 2026, Amazon reported revenue of $200.61 billion, a 19.62% year-over-year increase, and operating income of $27.46 billion, a 43.24% year-over-year jump. AWS experienced a 36.7% growth rate, its fastest since 18 quarters, and its backlog reached $496 billion. Despite a 1.89% decline in the stock price over the past week, Amazon's shares have surged 12.69% year to date and 16.22% over the past year.

Our analysts have set a target price of $343.50 for Amazon, representing a 32.8% upside from the current price of $259.39, and have rated the stock as a "buy" with a 90% confidence level. However, analysts have noted that Amazon did not make the cut in a recent list of top AI stocks recommended by the analyst who predicted NVIDIA's growth in 2010.

Capital expenditure in Q2 reached $54.21 billion, up 68.44% year-over-year, leading to negative free cash flow of $7.6 billion, and management expects roughly $200 billion in capex for 2026. Risks include the potential underperformance of AI monetization and a significant increase in capital expenditure without a commensurate improvement in return on invested capital (ROIC).