Amazon (AMZN) stock recently crossed its 52-week high to trade near $265, posting a 16% year-to-date gain. At that level, the 34x forward multiple leads many retail investors to conclude the stock has become expensive, typically by comparing it to its four-year historical forward average of roughly 29x. That comparison is the wrong benchmark for where Amazon stands today. The premium to its historical average is not a warning sign but a re-rating, as the market correctly prices in Amazon Web Services evolving into a dominant, high-margin AI infrastructure partner, a structural shift the historical average could never have captured.
The Custom Silicon Pivot And Validation
The market focus has shifted to the newly released Graviton5 architecture. Featuring 192 cores and a cache five times larger than its predecessor, Graviton5 reduces latency by 33% and delivers 25% better compute performance than Graviton4. For hyperscalers running…
