Selection for this week
Some Pros about the stock
Some Cons about the stock
Why the Quants like this stock
Criteria for choosing
The previous selections
The momentum stocks in the portfolio as a group were up since last Thursday. This makes the 19th stock to be added to the portfolio since it began on 5/20/26. I plan to convert this portfolio to a permanent one on my website in the near future. Stay tuned for details in the coming weeks.
Add: AMZN (Amazon.com) – Internet Retail
What does the company do?
Amazon.com (AMZN) operates a global e-commerce, cloud computing, advertising, and subscription business through three main segments: North America, International, and Amazon Web Services (AWS). The company sells a wide range of products through online and physical stores, including merchandise from third-party sellers, and offers devices such as Kindle, Fire TV, Echo, Ring, Blink, and eero. Amazon also provides digital content and publishing platforms for authors, musicians, filmmakers, developers, and other creators. AWS provides cloud services including computing, storage, databases, analytics, artificial intelligence, and machine learning, while advertising and Amazon Prime provide additional major revenue streams. Founded in 1994 and headquartered in Seattle, Washington.
Why Some Investors Are Bullish
AWS growth has accelerated significantly — Amazon Web Services revenue increased 37% year over year to $42.2 billion in Q2 2026, its fastest growth in 18 quarters. AWS operating income rose 64% to $16.6 billion, highlighting the profitability of Amazon’s cloud and AI infrastructure business.
AI is creating a major new growth opportunity — Demand for AI infrastructure is driving substantial investment across AWS, including Amazon’s Trainium and Graviton chips. Amazon has also reported a substantial AWS backlog, providing visibility into future cloud revenue.
Advertising and higher-margin businesses remain important growth drivers — Amazon’s advertising operation continues to expand alongside AWS, while its custom-chip business has also been growing rapidly. These businesses can help diversify Amazon beyond its traditionally lower-margin retail operations.
Strong long-term investment in AI infrastructure — Amazon now expects approximately $220 billion of capital expenditures in 2026, primarily reflecting investment in AI and cloud infrastructure. While the spending is substantial, management expects these investments to support long-term growth and returns on invested capital.
Multiple potential growth engines — Amazon combines e-commerce, AWS, advertising, Prime, AI infrastructure, custom chips, robotics and other emerging businesses. Recent market commentary has also remained constructive.
What Bears Are Worried About
Massive capital spending creates execution risk — Amazon’s roughly $220 billion 2026 capex plan represents an enormous commitment to AI and cloud infrastructure. The investment could generate substantial future returns, but investors will be watching closely to see whether the additional spending produces sufficient revenue and profit growth.
Free cash flow is under pressure from AI investment — Amazon generated $139.5 billion of operating cash flow in 2025, but trailing free cash flow fell to $11.2 billion as spending on property and equipment increased sharply. The company’s AI buildout could therefore keep reported free cash flow under pressure even as operating earnings grow.
Regulatory and legal risks remain significant — Amazon continues to face regulatory scrutiny. In August 2026, the FTC and 18 states filed a new case alleging Amazon used anticompetitive practices involving its advertising business, while a separate FTC matter involving Prime resulted in a $2.5 billion settlement and ongoing consumer payments.
Why the Quants like this stock
PEG Non-GAAP (FWD) B 0.93
Revenue Growth (FWD) A- +14.11%
EPS FWD Long Term Growth (3-5Y CAGR) A- +20.78%
ROE Growth (YoY) B+ 23.37%
Return on Common Equity (TTM) A- +30.56%
3M Price Performance A- +6.48%
FY1 Up Revisions (last 90 days) 48 Up 0 Down
Latest Quarter’s Earnings
Announce Date 7/30/2026
EPS GAAP Actual $5.75 (Beat by $3.92)
EPS Normalized Actual $5.75 (Beat by $3.93)
Revenue Actual $200.61B
Revenue Surprise Beat by $3.99B
My View
Amazon’s investment story increasingly revolves around AWS, AI infrastructure, advertising and custom silicon, rather than e-commerce alone. The key issue for investors is whether the company’s enormous AI capital expenditures ultimately translate into sufficiently strong revenue, earnings and free-cash-flow growth. With AWS accelerating but capital spending reaching extraordinary levels, execution and return on invested capital will be important metrics to watch over the next several quarters.
Top Quant Stock of the Week Criteria
I am using a Quantitative research platform that provides a daily list of top-ranked stocks to buy or sell, based on a Comprehensive Quant Score. This Quant system uses computer algorithms to come up with its rankings. This score incorporates multiple factors, including valuation, growth, profitability, momentum, and EPS revisions.
I will be giving heavy weight to strong momentum and strong EPS revisions to make the weekly selection. Then, I will use my tested proprietary criteria to sort and then break any tie.
One stock will be selected each week. That would make 52 selections a year if I don’t miss any weeks because of internet problems.
The hold times for the stocks added will be 1 week to years. Although a 1 week hold would be rare, it could happen if the stocks Quant metrics took a big nose dive right after being selected. If an added stock maintains its good metrics, it will be kept in the portfolio until it doesn’t. No time limit. The Quant system will tell me when it is time to let it go. So the hold time is short, medium and long depending on the Quant system metrics.
All countries are included. ADR’s are ok but Pink Sheet stocks will not be allowed.
Certain Industries are excluded. My testing shows they do not perform well using Quantitative rankings. Two of the main ones are BioTechnology and Pharmacueticals.
The Remove Criteria: Once the stock no longer qualifies to be retained in the Portfolio, it will be removed. This could be because the companies metrics have deteriorated since selection, it is involved in a buyout or financial reporting problems.
Once a stock has been added to the Active list, it will not be added to. No doubling down.
The stocks considered are larger small cap, mid cap, large cap and Mega cap. They will be fairly easy to trade with opening or closing market orders as one of the ways to enter and exit positions.
It should be expected that about 50 stocks will be Active in the Portfolio in any given week, once it gets to the two year mark.
All stocks are added as equal weight. No rebalancing is to occur.
To be considered for addition, the stock has to be in the top group of Quant rankings for just several weeks. This is to allow newly upgraded stocks to qualify quickly. Hopefully, this will catch a couple of strong momentum stocks early in their move.
Once a stock is removed for cause, it can be added back in once it meets the add criteria. No waiting period is required.
There will be no limits on percentages of stocks in the Portfolio by Sector or Industry.
Previous Selections:
Amazon looks pretty strong. My only concern is that it is already a very large company.