After all the excitement surrounding the record-breaking SpaceX IPO, Amazon (LSE: AMZN) stock almost feels old-school. Or maybe old hat. But don’t be fooled.
Investors had two or three decades to make their minds up over Amazon. SpaceX only became available on Friday (12 June). And it’s flown out of the blocks. Originally priced at $135, the share price quickly topped $200 and hit another landmark along the way.
On Tuesday SpaceX’s market cap hit $2.66trn, making it worth roughly $8bn more than Amazon. Briefly, it sneaked past Microsoft too. It’s all very exciting but can this continue? As a natural contrarian, I’m wary.
Can it really keep this up?
The SpaceX share price is on rocket boosters but some of that must surely be down to IPO hype. Plus of course the involvement of Elon Musk. He always raises the energy levels. Investors aren’t buying profits today, SpaceX made a $5bn loss last year. They’re buying the dream of stellar returns further down the line.
Only $85.7bn of shares were made available to the public, a small fraction of its $2.1trn market cap. As a result, the price could be prone to wild swings, depending on investor sentiment.
Personally, I’d be wary of buying SpaceX today. Things need to settle down a little so we find it it’s real value. But as I said, I’m a contrarian. Momentum investors might take a different view, and they might be right. It’s a personal thing. So what about Amazon?
Jeff Bezos’s vehicle is so much more than a retail platform. E-commerce still brings in the most revenues, but its Amazon Web Services cloud computing division is more profitable. The group also has major ventures in entertainment, logistics and digital advertising, as well as big new opportunities in AI and robotics, and satellites and space.
Yet while SpaceX flies, the Amazon share price is down 7% over the last month. And it’s up just a modest 15% over the last year. Some of the underperformance might even be down to Amazon stock holders liberating profits to invest in SpaceX.
Can this tech giant keep growing?
As a result, Amazon doesn’t look too expensive with a trailing price-to-earnings ratio of 31.4. The forward P/E is around 26. Not bad for a company whose net income jumped 31% in 2025 and has more than doubled over the past five years.
- 2025 – $77.67bn
- 2024 – £59.25bn
- 2023 – $30.43bn
- 2022 – ($2.27bn)
- 2021 – $44.36bn
That 2022 loss was driven by slowing post-pandemic demand, huge infrastrutcure spend and a $12.7bn valuation loss from its stake in Rivian Automotive.
Amazon has challenges. Like every tech company, it’s pouring money into AI infrastructure. Data centres eat energy and are being blocked in some areas due to lack of power or environmental concerns. Amazon is throwing capital at warehouse expansions too. All of which could put a big strain on the bottom line.
Investors may be distracted and looking elsewhere, but I’ll be keeping a close eye on Amazon. It may have lost its novelty value but remains a stunning company to consider. We may be looking at a buying opportunity here.
Should you invest £5,000 in Amazon right now?
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Harvey Jones does not hold any positions in the companies mentioned.
