Amazon's Report Passed Both Tests I Set for It. I'd Buy More of the Stock Now.

Amazon's Q3 report exceeded analyst expectations with AWS revenue growing 39% (sixth consecutive quarter of acceleration) and operating margin reaching a historic high of 13.9%. However, capital expenditures have surged to $75.9 billion in Q3 alone, with management expecting $220 billion for 2026 and more in 2027, turning free cash flow negative at -$42.4 billion over the past 12 months. Despite the AI spending concerns, the analyst recommends buying more Amazon stock at current levels around $250, citing a fair P/E ratio of 23x on 2027 estimates.