Amazon (NASDAQ: AMZN) fell again after reporting fourth-quarter earnings, renewing debate over whether the stock’s multi-year underperformance versus the S&P 500 has created an opportunity.

### The near-term concern: cash flow vs. investment

One friction point for investors is the trade-off between near-term free cash flow and aggressive spending to expand cloud/AI capacity. The source article highlights a large 2026 capital-expenditure plan aimed primarily at AWS.

### Bullish drivers cited

**1) Retail margin expansion**

Amazon’s North America commerce segment has been showing improved profitability, supported by higher-margin lines like advertising and subscription services.

**2) AWS growth tied to AI infrastructure**

As enterprises and hyperscalers scale AI workloads, demand for compute and cloud services can support faster AWS growth. With AWS operating margins historically elevated, incremental revenue can meaningfully move consolidated earnings power.

### Key questions for investors

- Can AWS growth remain strong as competition and customer optimization continue?

- Will retail profit expansion persist as logistics and fulfillment costs evolve?

- How quickly does the capex cycle translate into revenue acceleration and higher earnings?

Source: Nasdaq (The Motley Fool)