AMZN Valuation Hits Decade Low as AWS Eyes 38% Growth and Chip Revenue Tops $10B

⬤ Amazon (AMZN) is drawing fresh attention in equity markets as valuation multiples approach levels unseen for roughly ten years. A long-term chart comparing EV/EBIT and forward P/E shows EV/EBIT compressed to around 23.8x and forward P/E near 27.7x, both well below historical peaks. That compression comes just as expectations for Amazon Web Services renewed growth are quietly picking up.

⬤ The drop in multiples tells a clear story. Back in 2017-2018, Amazon's EV/EBIT ratio surged above 170x. Since then, rising interest rates, margin pressure, and a market-wide pivot toward profitability have steadily deflated those numbers. Today, AMZN is priced closer to a mature industrial company than a high-growth tech name, a reset some analysts argue has gone too far.

⬤ AWS is the engine Wall Street is watching most closely. UBS analysts project that AWS growth could accelerate toward 38% on the back of surging enterprise demand for AI and large-scale compute. Capacity constraints are already a talking point, with cloud infrastructure backlogs suggesting demand is outpacing supply in key regions.

⬤ Beyond cloud services, Amazon's vertical integration in silicon is becoming a genuine revenue story. Its proprietary chip business, covering AI and machine learning workloads, has reportedly reached an estimated $10 billion annual run rate. That puts Amazon in rare company among cloud providers building end-to-end infrastructure stacks. The combination of compressed multiples and expanding hardware capabilities has led some on the Street to argue that AMZN has quietly shifted from a growth story to a value play.

⬤ The broader picture for Amazon reflects a tension running through the entire tech sector: markets are balancing AI-driven growth potential against the capital intensity required to deliver it. If AWS continues gaining share while internal chip economics improve, today's valuation floor may look like an opportunity in hindsight.