Amazon (AMZN) Stock: Top Investor Calls It a Bargain as OpenAI Chip Deal Emerges

TLDR

• Amazon stock is trading flat for 2025 despite strong business performance, with a Forward P/E around 30x that’s lower than Walmart and Costco
• Top investor Geoffrey Seiler calls Amazon stock a bargain, pointing to 11% North American e-commerce growth and 20% AWS revenue growth
• Amazon is in talks with OpenAI for a potential $10 billion investment and a deal for OpenAI to use Amazon’s Trainium chips
• Amazon’s custom Trainium chips may soon compete directly with Google TPUs and Nvidia GPUs in real AI workloads
• Wall Street analysts give Amazon a Strong Buy rating with 44 Buy ratings and an average price target of $296.12, implying 30%+ upside

Amazon stock has been stuck in neutral this year. Shares are roughly flat for 2025 while other tech giants have racked up gains. But according to top investor Geoffrey Seiler, that’s creating an opportunity.

His reasoning is pretty straightforward. The company is performing well on multiple fronts, yet the market isn’t giving it much credit.

Amazon.com, Inc., AMZN

The numbers back up his optimism. North American e-commerce sales jumped 11% last quarter. Amazon Web Services grew revenue by 20% year-over-year. These aren’t the metrics of a company that should be treading water.

The valuation story gets more interesting when you zoom out. Amazon’s Forward P/E sits around 30x. Compare that to Walmart and Costco, both sporting multiples above 40x. In other words, the market is willing to pay more for traditional retailers than for Amazon’s combination of e-commerce dominance and cloud computing leadership.

Seiler points to Amazon’s massive AI infrastructure spending as another growth driver. The company continues building out data center capacity to meet rising AI demand. That investment is already paying off in AWS growth numbers.

OpenAI Partnership Could Boost Chip Strategy

Fresh news this week added another wrinkle to the Amazon story. Reports emerged that Amazon is negotiating with OpenAI on two fronts. First, a potential $10 billion investment. Second, a deal for OpenAI to start using Amazon’s custom Trainium chips.

The chip angle matters more than it might seem at first glance. Amazon has been developing its own AI silicon for years. But outside of Amazon’s own operations, we haven’t seen much proof of how these chips stack up against competitors.

If OpenAI starts using Trainium chips, we’ll get real-world data on their performance. That’s a big deal. OpenAI runs some of the most demanding AI workloads on the planet with ChatGPT and its other models.

The potential partnership would pit Amazon’s chips against Google’s TPUs and Nvidia’s GPUs. OpenAI’s usage patterns and ordering decisions could signal which custom silicon solutions have the edge.

Investors haven’t rushed to bid up Amazon stock on the OpenAI news yet. Maybe they’re tired of the circular dealmaking across the AI landscape. Or maybe concerns about heavy AI spending are weighing on sentiment.

Strong Fundamentals Meet Wall Street Approval

Amazon already has a meaningful AI relationship through its investment in Anthropic. Adding OpenAI to that roster would strengthen Amazon’s position in the AI infrastructure race even further.

The company recently appointed Rohit Prasad as its new head of artificial general intelligence. That move signals Amazon’s commitment to pushing deeper into AI development.

Wall Street analysts are overwhelmingly bullish on the stock. The consensus rating is Strong Buy with 44 Buy recommendations and just 1 Hold. Not a single analyst rates it a Sell.

The average 12-month price target sits at $296.12. That implies potential gains exceeding 30% from current levels.

Amazon scored a major win earlier this year with a $38 billion cloud computing deal with OpenAI. The company remains one of the biggest capital spenders in AI infrastructure across the tech sector.

Amazon’s warehouse robotics operations represent another growth avenue that doesn’t get discussed as much as it probably should. The company continues automating its fulfillment network, which could improve margins over time.

The potential OpenAI chip deal could mark an inflection point for Amazon’s AI ambitions. If Trainium chips prove competitive in real-world deployments, Amazon could capture a bigger slice of the AI infrastructure market beyond its own operations.

Amazon’s current trailing P/E of 31.4x looks reasonable given its growth profile and AI positioning. The market may be undervaluing Amazon’s AI chip development efforts and strategic partnerships.

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