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Amazon (AMZN) stock, which gained a mere 5% last year and was the worst-performing “Magnificent 7” stock, has had a strong start to 2026, already up over 5% for the year. In a reversal of fortunes of sorts, it is the best-performing Mag 7 so far. While it's too early to extrapolate whether AMZN can continue its good run, it looks like a name to hold this year, as we’ll explore in this article.
To begin with, let’s examine the various factors behind Amazon’s underperformance last year. Firstly, there is growing concern over Amazon's burgeoning capex towards artificial intelligence (AI). This is taking a toll on the company’s free cash flows for now and would be an overhang on earnings in the coming years in the form of higher depreciation.
