By Ryan Vlastelica and Carmen Reinicke

(Bloomberg) — Amazon.com Inc. (AMZN) bulls are betting that the company’s stock is primed to reestablish its market leadership after years of trailing its Big Tech rivals.

The optimism starts with demand for the Amazon Web Services cloud-computing business, which is positioned to benefit from the explosion of artificial intelligence technology. In addition, AI is seen helping the company’s better-known e-commerce unit, which should get more refined advertising targeting and improved efficiency across its vast logistics operation.

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“An improvement in AWS should help materially in terms of the perception of the stock as being the relative loser in cloud,” said Pat Burton, a portfolio manager at Winslow Capital Management, who counts Amazon as one of his biggest overweights among the Magnificent Seven tech giants.

Amazon shares were the worst performers among the Mag Seven in 2025, their seventh straight year trailing the group. The stock’s 5% gain for the year also fell way short of the 20% pop in the tech-heavy Nasdaq 100 Index (^NDX). Things have reversed in the early days of 2026, with the shares up slightly even after Tuesday’s 3.4% decline, trailing just Alphabet Inc. as the rest of the Magnificent Seven sells off to start the year.

The stock’s underperformance during the past few years has left it relatively inexpensive, at least historically speaking. Amazon is trading for around 24 times projected earnings over the next 12 months, which is less than Apple Inc. (AAPL), Microsoft Corp. (MSFT) and Alphabet and significantly below its five-year average of 36.

Wall Street pros point to Alphabet’s (GOOG, GOOGL) stunning 2025 rebound as a model for what can happen to Amazon. Google’s parent was seen as a loser in the AI race for years, and its stock market performance trailed Amazon and the Bloomberg Magnificent 7 index in 2023 and 2024. At this time last year, its shares were the cheapest among the group of tech giants.

Netflix Inc. delivered fourth-quarter results that largely beat Wall Street estimates but issued a cautious forecast for the months ahead, citing higher program spending and the cost of closing its deal with Warner Bros. Discovery Inc.

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• Nvidia Corp. Chief Executive Officer Jensen Huang is planning to travel to China in late January as he works to reopen a crucial market for his company’s artificial intelligence chips.

• Chinese authorities have fined PDD Holdings Inc. 100,000 yuan ($14,000) for failing to file essential tax documents in time, a modest penalty for a company that’s the target of a widening government probe.

• Alibaba Group Holding Ltd. has set up an electricity generation venture with one of China’s leading nuclear conglomerates, a move that could help secure the immense power needed to run AI data centers.

• OpenAI said it will pay for the costs of developing energy-related infrastructure required by its Stargate data centers to address concerns the facilities may drive up consumers’ utility bills.

Earnings Due Wednesday

• No major earnings expected

—With assistance from Subrat Patnaik and David Watkins.

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