A pair of recent headlines are underscoring why I’m so bullish on Amazon (AMNZ)…
The company announced today that it’s acquiring satellite company Globalstar in a $10.8 billion deal. As the WSJ reports, the deal will help the Amazon Leo service compete with Elon Musk’s Starlink:
The satellite industry is rushing to find ways to provide connections to airplanes and on cellphones, anticipating a large market will coalesce in the coming years…
Amazon plans to deploy its own direct-to-device satellite system beginning in 2028, pending regulatory approval…
“Amazon Leo has been falling behind Starlink on satellite broadband. Acquiring Globalstar allows them to catch up,” said Armand Musey, president of consulting firm Summit Ridge Group.
The WSJ also reported that Amazon is making a big push to sell new cars by expanding its Amazon Autos service:
… Amazon is now tackling one of the biggest retail businesses in the U.S. and one of the last major purchases that is still difficult to make online: new cars. Around $1.3 trillion of cars were sold by dealerships in the U.S. last year, according to the National Automobile Dealers Association.
As the article notes, Amazon aims to work with dealerships rather than replace them:
The aim is to let customers complete much of the purchase and financing paperwork from home, cutting down on the amount of time spent in a physical store. Dealers pay a fee to have their cars listed on Amazon, but shoppers don’t incur additional costs if they pull the trigger.
Car buying is another traditional business that Amazon, whose recent expansions include healthcare, groceries and big-box retail, has the potential to disrupt. Yet Amazon says it doesn’t plan to cut out dealerships – even if it could upend the traditional car-buying process.
Amazon Is a Great Opportunity at 10-year Low
I think these two investments will pay off for Amazon, translating into significant revenue, margin, and profitability growth going forward.
At the same time, Amazon is trading at a forward price-to-earnings (P/E) multiple of just over 31 times – close to its lowest ever, as you can see in this 10-year chart:
Amazon’s dominance, growth trajectory, and valuation are why it’s my favorite tech stock for 2026.
Editor’s Note: This article was adapted from today’s edition of Whitney Tilson’s Daily. Every day, Whitney emails his readers with his comments on the most important topics of the day, including stocks he’s investigating… great articles he has read… his media and podcast appearances. You can sign up here to receive all of Whitney’s daily thoughts and insights.
