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Will Amazon's Agentic AI Strategy Unlock Big Upside for the Stock Now?
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Key Takeaways
Amazon's Seller Assistant now automates seller workflows, monitors key metrics and can take approved actions.
Alexa for Shopping users nearly doubled, while Ads Agent cut costs and advertising growth reached 26%.
Amazon's AI investment drove a $7.6 billion free cash flow outflow as property spending surged $66.1 billion.
Amazon (AMZN - Free Report) is pushing agentic AI deeper into its marketplace, and its latest move targets third-party sellers. On Sept. 23, 2026, the company expanded Seller Assistant with new workflows that let sellers create recurring automations that run even when they are not logged into Seller Central, monitoring inventory thresholds, competitive pricing, account health and product ratings, with the option to either generate recommendations or take approved actions. The assistant now retains memory of a seller's pricing patterns, inventory cycles and growth goals, and a plug-in connects it to tools sellers already use, starting with Amazon Quick and Anthropic's Claude. However, the service is free and optional, so any financial benefit will be indirect, coming through seller productivity, selection and advertising engagement.
Agentic features are already gaining traction elsewhere in the business. Alexa for Shopping, which combines Rufus and Alexa+, nearly doubled active users in the second quarter, with interactions up more than 5x year over year, and U.S. customers using it spend over 40% more per order. Ads Agent, expanded to 11 new countries this year, delivers 8% lower cost-per-impression and 6% lower cost-per-acquisition, supporting advertising growth of 26%. In Amazon Web Services (“AWS”), Bedrock AgentCore added Payments and Web Search capabilities, while Kiro usage tripled sequentially.
The fundamentals support this strategy. Second-quarter net sales rose 20% to $200.6 billion, and operating income climbed 43% to $27.5 billion. AWS sales grew 37% to $42.2 billion, and its AI business exceeded a $25 billion annual run rate. For the third quarter, Amazon expects net sales of $197-$202 billion, up 9-12% year over year, or nearly 400 basis points higher excluding Prime Day timing, and operating income of $22.5-$26.5 billion compared with $17.4 billion a year ago.
Spending remains the key overhang. Trailing-12-month free cash flow swung to a $7.6 billion outflow as property and equipment purchases rose to $66.1 billion, mainly for AI. The upside from agentic AI looks real, but its near-term impact on the stock depends on monetization catching up with investment.
Walmart and eBay Push AI Tools for Sellers
Walmart (WMT - Free Report) and eBay (EBAY - Free Report) are embedding AI into seller operations. Walmart's super-agent Marty supports suppliers, advertisers and sellers, and Walmart's momentum shows in its second-quarter fiscal 2027 results, with U.S. marketplace sales up 52% and advertising up 38%. eBay expanded its Magical Listing tool to new and reactivated listers in the United Kingdom and Germany, while its AI card-scanning feature surpassed 80 million scans. eBay's second-quarter GMV rose 15% to $22.4 billion, and eBay raised full-year GMV growth guidance to 11.5% to 12.5%. Still, compared with Amazon, both Walmart and eBay are applying AI across narrower seller bases, limiting the reach of these tools.
Amazon shares have returned 8% in the year-to-date period, outperforming the Zacks Internet – Commerce industry’s growth of 0.3% and the Zacks Retail-Wholesale sector’s decline of 2.9%.
AMZN’s Year-to-date Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, AMZN stock appears overvalued, trading at a forward 12-month price/earnings ratio of 21.99X, higher than the industry’s 20.65X. Amazon has a Value Score of D.
AMZN’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AMZN’s 2026 earnings is pegged at $13.01 per share, indicating an 81.45% increase from the figure reported in the year-ago quarter.
View the Zacks #1 Rank List
Image: Bigstock
Will Amazon's Agentic AI Strategy Unlock Big Upside for the Stock Now?
Key Takeaways
Amazon (AMZN - Free Report) is pushing agentic AI deeper into its marketplace, and its latest move targets third-party sellers. On Sept. 23, 2026, the company expanded Seller Assistant with new workflows that let sellers create recurring automations that run even when they are not logged into Seller Central, monitoring inventory thresholds, competitive pricing, account health and product ratings, with the option to either generate recommendations or take approved actions. The assistant now retains memory of a seller's pricing patterns, inventory cycles and growth goals, and a plug-in connects it to tools sellers already use, starting with Amazon Quick and Anthropic's Claude. However, the service is free and optional, so any financial benefit will be indirect, coming through seller productivity, selection and advertising engagement.
Agentic features are already gaining traction elsewhere in the business. Alexa for Shopping, which combines Rufus and Alexa+, nearly doubled active users in the second quarter, with interactions up more than 5x year over year, and U.S. customers using it spend over 40% more per order. Ads Agent, expanded to 11 new countries this year, delivers 8% lower cost-per-impression and 6% lower cost-per-acquisition, supporting advertising growth of 26%. In Amazon Web Services (“AWS”), Bedrock AgentCore added Payments and Web Search capabilities, while Kiro usage tripled sequentially.
The fundamentals support this strategy. Second-quarter net sales rose 20% to $200.6 billion, and operating income climbed 43% to $27.5 billion. AWS sales grew 37% to $42.2 billion, and its AI business exceeded a $25 billion annual run rate. For the third quarter, Amazon expects net sales of $197-$202 billion, up 9-12% year over year, or nearly 400 basis points higher excluding Prime Day timing, and operating income of $22.5-$26.5 billion compared with $17.4 billion a year ago.
Spending remains the key overhang. Trailing-12-month free cash flow swung to a $7.6 billion outflow as property and equipment purchases rose to $66.1 billion, mainly for AI. The upside from agentic AI looks real, but its near-term impact on the stock depends on monetization catching up with investment.
Walmart and eBay Push AI Tools for Sellers
Walmart (WMT - Free Report) and eBay (EBAY - Free Report) are embedding AI into seller operations. Walmart's super-agent Marty supports suppliers, advertisers and sellers, and Walmart's momentum shows in its second-quarter fiscal 2027 results, with U.S. marketplace sales up 52% and advertising up 38%. eBay expanded its Magical Listing tool to new and reactivated listers in the United Kingdom and Germany, while its AI card-scanning feature surpassed 80 million scans. eBay's second-quarter GMV rose 15% to $22.4 billion, and eBay raised full-year GMV growth guidance to 11.5% to 12.5%. Still, compared with Amazon, both Walmart and eBay are applying AI across narrower seller bases, limiting the reach of these tools.
AMZN’s Share Price Performance, Valuation & Estimates
Amazon shares have returned 8% in the year-to-date period, outperforming the Zacks Internet – Commerce industry’s growth of 0.3% and the Zacks Retail-Wholesale sector’s decline of 2.9%.
AMZN’s Year-to-date Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, AMZN stock appears overvalued, trading at a forward 12-month price/earnings ratio of 21.99X, higher than the industry’s 20.65X. Amazon has a Value Score of D.
AMZN’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AMZN’s 2026 earnings is pegged at $13.01 per share, indicating an 81.45% increase from the figure reported in the year-ago quarter.
Amazon.com, Inc. Price and Consensus
Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote
Amazon currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.