Amazon (NASDAQ: AMZN) has a market capitalization of $2.3 trillion, and its share price has moved 44% higher over the last five years. While the company’s valuation still managed to march higher over the last half-decade, the cloud-computing and e-commerce giant has the unenviable distinction of being one of only two “Magnificent Seven” companies to underperform the S&P 500‘s level increase of roughly 80% over the stretch.
Microsoft is the only other Mag 7 stock to lag behind the benchmark index, and its share-price gain of roughly 78% over the period is just slightly behind the index’s. Meanwhile, Nvidia‘s stock has rocketed 1,330% higher over the last five years. The tech company’s leadership position in advanced graphics processing units (GPUs) used for artificial intelligence (AI) processes has allowed its stock to post incredible gains.
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The rise of AI has also played a huge role in powering market-beating gains for most Magnificent Seven stocks.
With many top tech companies seeing strong sales and earnings growth connected to AI, Amazon stock’s relative underperformance stands out in a big way. On the other hand, there are good reasons to bet against the stock continuing to be a laggard.
Read on to see why Amazon has the potential to surge 74% and join Nvidia in the $4 trillion club.
In 2025, Amazon posted sales of $716.9 billion and surpassed Walmart to become the world’s largest company by revenue. While Amazon generates profit margins that are significantly better than Walmart’s, its levels of net income generation relative to revenue come in much lower than most companies in the Magnificent Seven. The reason for the margin disparity compared to other tech leaders is that Amazon still generates most of its revenue from its e-commerce business, and online retail is a highly cost-intensive business.
While the much higher margin Amazon Web Services segment accounted for just 18% of total revenue last year, it accounted for $45.6 billion of the company’s total of $80 billion in operating income. The company’s Amazon Web Services cloud infrastructure segment has already seen sales growth supported by rising AI demand and should continue to power earnings growth, but there could be even better news for investors.
