u/Beautiful_Cobbler603

I get the appeal of the memory trade. Micron up 550%, SanDisk up 3,000%, shortage pricing, fat margins, the whole thing. But I what keeps me from entering memory is when you start to ask what am I actually buying when I buy a memory stock right now? I'm buying a cyclical commodity at the top of a shortage cycle, betting that the imbalance lasts longer than the market already expects it to. It can be a good trade, but so can a lot of other things, especially if you aren't worried about a short term horizon.

For me, Amazon at this price feels like a genuinely great business that the market has decided to ignore because it's busy chasing the shiny thing. So I've been adding at this price.

Here is my breakdown and reasons

The Valuation

The valuation is the part that doesn't make sense to me. Amazon trades at a trailing P/E around 27 right now. Its ten-year average is north of 90, and even its more normalized recent average sits in the low 30s. The current multiple is roughly 72% below its ten-year historical average, and it's trading below its 3, 5, and 10-year averages. This is a company that for most of its public life was "too expensive" on every earnings metric, and now that it's actually printing record profit, the multiple has compressed. You're paying less for Amazon's earnings today than at almost any point in its history, while the earnings quality has never been higher.

The Business

the business is firing on every cylinder at once. Q1 came in at $181.5B revenue up 17%, with a record 13.1% operating margin which is thhe highest in company history. AWS grew 28% to $37.6B, its fastest pace in 15 quarters, at a 37.7% segment operating margin. Net income nearly doubled to $30.3B. Advertising hit $17.2B, up 24%, and trailing-twelve-month ad revenue now tops $70B — bigger than the entire AWS business was back in 2018, and it carries software-like margins. Retail, cloud, and ads are all accelerating together. That basically never happens.

Why compare memory?

Now why did I bring up memroy before? This is where the memory comparison actually matters. Everyone's rewarding Micron for having a constrained product with a backlog. Fine. But look at what Amazon's sitting on: an AWS backlog of $364B at quarter end and that's before OpenAI expanded its existing $38B AWS commitment by another $100B over eight years. Amazon is also putting $50B into OpenAI directly. That's a bigger, longer, stickier backlog than anything in the memory space, with customers who can't just switch suppliers when prices move. A hyperscaler customer with petabytes of data and trained models on AWS isn't shopping around the way a memory buyer does. The scarcity story everyone loves about Micron is actually stronger for AWS, and nobody's pricing it that way. 

Further, AWS AI revenue is already at a $15B+ run rate and scaling 260x faster than AWS itself did in its first three years. Jassy's point that resonates with me: AI is creating net-new compute demand with no on-prem equivalent to displace, it's not a migration, it's pure additive demand. That's a different animal than the old cloud growth story.

the bonus part with Space

And then there's the free option nobody talks about: Leo. Amazon Leo (the old Project Kuiper) has 367 satellites up, making it the third-largest constellation in orbit, with beta service targeting five countries including the US later this year. They've already got enterprise customers signed pre-launch; Delta, JetBlue, AT&T, Vodafone, NASA, with Delta committing half its fleet from 2028. Jassy is openly calling it a "very large many-billion-dollar revenue business" with AWS-style economics: heavy upfront capex, then free cash flow improves sharply as capacity monetizes. They also moved to acquire Globalstar, which brings licensed spectrum, regulatory approvals in 100+ countries, and direct-to-device capability. When I buy Amazon I'm not paying anything for a global satellite internet business that's about to go live. That's just thrown in.

So why is it lagging? 

Ofc it is the same reason as the rest of mega-cap tech, the capex panic. Amazon spent $43.2B in a single quarter, mostly on AWS and AI. Free cash flow is expected to go deeply negative in 2026 as peak capex hits the cash flow statement, before recovering hard in 2027. The market sees the cash going out and refuses to credit what it's building, even though the backlog and the pre-signed Leo contracts tell you the demand for that capacity already exists. This is the exact same "spend money to make money" dynamic everyone's nervous about, except Amazon has done this before. AWS itself was a money pit that everyone hated until it became the most profitable thing the company owns. They are running the identical playboo now, twice over, with AI infrastructure and with Leo.

On the price. 

Averaging the analyst targets issued since Q1 results, I get an average of about $321. Against today's ~$230, that's roughly 40% upside, and the consensus rating is Strong Buy. I don't treat targets as gospel, but the direction and the spread tell me I'm not the only one who thinks this is mispriced.

The memory trade is betting a shortage lasts. The Amazon position is betting that a business compounding across four engines, retail, cloud, ads, and now satellite, eventually gets priced like one instead of like a discount retailer. I'd rather own the second thing at 27x earnings than chase the first thing after a 550% run.

Anyway this is all my opinions and opinions based on waht I have read, so I am curious what others think of Amazon at this price?

NVDA is trading below last year's highs. Since then it has beaten expectations twice, announced an $80B buyback, and expanded into entirely new industries. The math doesn't add up.

Let's start with what the business actually did

Most recent quarter: $81.6B in revenue, up 85% year over year. Data center revenue hit $75.2B, up 92% YoY. Non-GAAP EPS came in at $1.87 against a consensus of $1.77. The quarter before that, Q4 FY2026 delivered $68.1B in revenue, a 73% YoY increase, with GAAP EPS of $1.62 on a non-GAAP basis, comfortably ahead of forecasts and up roughly 80% YoY. Two consecutive massive beats. The stock is lower than it was before either of them.

Gross margins are sitting at 63% profit margin with an operating margin of 65.6% and return on equity of 114.3%. These are not the numbers of a company running out of steam.

The buyback the market ignored

Nvidia authorized $80 billion in additional stock buybacks and bumped its quarterly dividend 25-fold to $0.25 per share, returning approximately $20 billion to shareholders in Q1 alone. An $80B buyback at a $5T market cap is meaningful. Management is telling you directly they think the stock is cheap.

The "rule of large numbers" argument is lazy

Yes, $5 trillion is a big number. A few years ago nobody thought we'd have this many $1T companies. The argument that size alone limits growth ignores that Nvidia isn't done building its addressable market**,** it's just starting on most of it.

At GTC 2026, Jensen Huang said purchase orders tied to Blackwell and Vera Rubin could reach $1 trillion by 2027 — up from the $500B opportunity the company had talked about just a year earlier. Partnerships were announced across automotive, telecom, cloud infrastructure, robotics, and industrial AI with companies including Hyundai, Kia, T-Mobile, Nokia, BYD, Nissan, Uber, Foxconn, Dell, Meta, Oracle, and Alibaba. This is not a company maintaining its position. It is quite literaly colonizing new industries.

The competition argument actually supports Nvidia

People point to Google, Amazon, and new competition like cerebras building their own chips as a bear case. It's actually the opposite. Custom chips exist to handle specific internal workloads efficiently. They don't replace Nvidia for general-purpose AI training, frontier model development, or the thousands of companies that don't have the engineering resources to build their own silicon. Jensen Huang put it plainly: Nvidia is "the only platform that runs in every cloud, powers every frontier and open source model, and scales everywhere AI is produced." Internal chips fragment the market at the edges. Nvidia owns the core.

The Micron comparison doesn't hold

Nvidia gets lumped in with semiconductor commodity names like it's the same trade. It isn't. Micron benefits from a supply shortage — constrained production, rising spot prices, a dynamic that reverses when supply normalises. Nvidia's expansion spans CPUs, robotics, autonomous vehicles, healthcare, and agentic AI platforms, with new partnerships across every major vertical. Micron sells one product into a cyclical market. Nvidia is building a platform across a dozen industries simultaneously. When competition increases or memory supply normalises, Micron has a real problem. When more companies build AI — which means more GPUs, more training, more inference — Nvidia gets paid regardless of who wins.

What Nvidia is becoming

Nvidia launched the Vera CPU, described as the first processor built for agentic AI and reinforcement learning, delivering twice the efficiency and running 50% faster than traditional rack-scale CPUs. On robotics, Boston Dynamics, Caterpillar, Franka Robotics, LG Electronics, and NEURA Robotics are all building on the Nvidia stack. Healthcare is going through its own ChatGPT moment on Nvidia infrastructure, spanning drug discovery, AI agents for diagnosis, and physical AI robotic systems. The company that dominated gaming GPUs is now the operating system for the next industrial revolution.

What analysts think

37 Wall Street analysts have issued price targets in the last 3 months with an average of $309, implying 53% upside from the current price of ~$201. The consensus is Strong Buy with 36 buys and 1 hold. Averaging targets issued since March and comparing to today's price of $200, the implied upside is approximately 60% to ~$320. The lowest target in that window is $250. Even the most cautious analysts see significant upside from here.

The stock is below where it was when it was a smaller, slower-growing, GPU-only business. It has since beaten expectations twice, returned $20B to shareholders in a single quarter, authorised an $80B buyback, and announced it is entering CPUs, robotics, automotive, healthcare, and industrial AI at scale. At some point the price has to reflect the company.

Not financial advice. just my opinions