George Budwell, The Motley Fool

Mon, May 19, 2025, 6:30 AM5 min read

• Large-cap tech stocks have been the market’s core growth drivers since the turn of the century.

• As a result, most of these companies sport sky-high valuations.

• Amazon is one of the few exceptions, which is surprising given the company’s leading positions in cloud computing, robotics, and quantum computing.

• These 10 stocks could mint the next wave of millionaires ›

Tech stocks have driven the bulk of market gains over the past two decades, fueled by relentless innovation and digital transformation. But as investors continue to bid up the usual suspects, truly compelling value opportunities have become increasingly scarce in the big tech arena.

Amazon (NASDAQ: AMZN), however, remains a notable exception. Despite robust business fundamentals, the stock has underperformed in 2025, falling 6.3% year to date. That disconnect presents a compelling opportunity. Here are three reasons Amazon stock looks like a rare bargain at current levels.

Amazon Web Services (AWS) continues to be the company's main profit engine. In Q1 2025, AWS posted revenue of $29.3 billion, up 17% year over year, and generated $11.5 billion in operating income -- far surpassing the profitability of Amazon's other operating segments.

AWS holds roughly 30% of the global cloud infrastructure market, ahead of Microsoft Azure, at around 21%, and Alphabet's Google Cloud, at about 12%. That dominant position, coupled with enterprise demand for artificial intelligence (AI) and machine learning workloads, provides Amazon with high-margin, recurring revenue that's only accelerating.

Best of all, CEO Andy Jassy recently noted that AI-related workloads on AWS are growing at triple-digit rates, driven by companies deploying generative AI tools and large language models across every industry vertical. That's a massive opportunity for savvy investors.

Amazon has quietly become a global leader in automation. More than 750,000 robots now operate within its fulfillment network, from mobile drive units that move shelves to advanced systems such as Sparrow and Cardinal that handle complex sorting tasks.

The latest robotic fulfillment centers process orders roughly 25% faster and cut the cost to serve by about 25%, particularly during peak shopping periods. As of this year, around 75% of Amazon customer orders involve some form of robotic assistance.

Analysts at Morgan Stanley estimate that warehouse automation could yield $10 billion in annual cost savings by 2030 for the e-commerce giant. With a decade-long lead and full-stack robotics integration, Amazon is building a logistics moat its rivals will struggle to match.