Long story short, an enormous amount of capital is rapidly being spent on AI data centers and the necessary equipment to train and run powerful AI models, particularly graphics processing units (GPUs) from Nvidia (NASDAQ: NVDA).

Nadella said the lesson was how “you have to not only get the tech trend right, you also have to get where the value is going to be created with that trend.”

Microsoft CEO Satya Nadella in a recent interview said that his company missed out on what turned out to be the biggest business model on web: search. Talking to Dwarkesh Patel, he further predicted that AI will not be a winner-take-all model.

That places Amazon stock at a price-to-earnings ratio (P/E) of 40.9. It's still a premium to the Nasdaq-100 index, which represents all of Amazon's big-tech peers and trades at a P/E of 33.8. However, the picture looks a little different when we consider the company's potential.