Amazon Q2 sales jump 20%, PE drops to 22

Amazon’s stock price keeps rising, but its valuation keeps falling, making it look like a bargain.

The online giant’s price-to-earnings ratio has dropped to 22, below the S&P 500 average of 30, even as its share price climbed past a $3 trillion market cap before pulling back. The drop comes after Amazon posted blockbuster second-quarter results: net sales rose 20% to $201 billion, with cloud business AWS growing 37%. Net income surged 244% to $62.6 billion, pulling the P/E ratio down sharply. The company also raised its 2026 capital spending to $220 billion, a record haul funded by bonds despite $123 billion in cash on hand. Critics worry about the spending binge, but the latest numbers suggest the investments are paying off.

Target’s rebound is gaining momentum after years of struggles. Early in the 2020s, supply chain chaos and store neglect pushed customers away and hurt sales. A leadership overhaul brought in CEO Michael Fiddelke, who pledged $5 billion to fix stores and logistics. The turnaround is already visible: same-store sales are rising, and foot traffic is climbing. Analysts now argue Target’s stock is still cheap compared with rivals, trading near mid-teens forward P/E while offering steady dividends. Shares have rebounded from pandemic lows, but some analysts see more upside if the trend holds.

Nvidia’s stock still looks cheap despite its explosive growth, according to a classic valuation signal that flashed again this year. In 2009 the so-called “Double Down” signal lit up for Nvidia when it was a small chipmaker. Now the same signal is appearing for a company one-hundredth Nvidia’s current size, signaling potential for similar gains. Nvidia’s revenue and profit have exploded thanks to demand for AI chips, yet its P/E remains below historic peaks. That gap suggests investors may be underpricing the company’s long-term prospects even after its recent rally.