$AMZN is making one of its boldest long-term bets yet, with CEO Andy Jassy signaling that AI could unlock up to $200 billion in revenue over time. The core of this strategy runs through $AWS, where Amazon is pouring massive capital into data centers, custom AI chips, and infrastructure to support the explosion in generative AI workloads. Right now, AWS is already the profit engine of the company, but growth has slowed compared to the pandemic boom. Management believes AI can reaccelerate that growth cycle, similar to how cloud computing transformed Amazon a decade ago. Jassy has been clear that most companies don’t want to build their own AI infrastructure, they want to rent it. That plays directly into Amazon’s strengths. On the retail side, margins remain under pressure due to logistics costs, wage inflation, and heavy investment. However, Amazon has been steadily improving efficiency, cutting costs, and pushing higher-margin services like advertising, third-party seller tools, and Prime add-ons. Ads in particular are becoming a quiet powerhouse, adding another lever beyond e-commerce. The risk here is execution and spending discipline. Capital expenditures are massive, competition from $MSFT and $GOOGL is intense, and AI demand must scale fast enough to justify the investment. But if AI adoption follows anything close to the cloud curve, Amazon is positioned as one of the biggest long-term winners. This is a classic long-duration play: near-term margin pressure, heavy spending, and volatility, but potentially enormous payoff if AWS becomes the backbone of the AI economy.