Amazon CEO Andy Jassy.

There is a lull of a week or two before the storm of earnings season arrives.

While waiting for third-quarter results, one phenomenon is worth pondering: investors are frantically chasing semiconductor stocks and visionary enterprises like SpaceX, while capital keeps flowing out of shares of established technology giants.

Some veteran tech companies now have share prices that have fallen into highly cost-effective territory, and Amazon.com (AMZN) in particular deserves more attention from the market.

We all know the many criticisms the market has of Amazon: like Alphabet and Meta, Amazon is spending heavily on capital expenditures, splashing out $220 billion this year alone to build AI data center computing power.

This investment undoubtedly carries risk, with returns highly dependent on whether commercial demand for AI services can explode.

Even so, Amazon's valuation has been below Walmart's for about 18 consecutive months, which is unreasonable.

Koyfin data shows that Walmart's expected revenue growth this year is about 5.6%, only one-third of Amazon's expected growth rate; yet Walmart's forward price-to-earnings ratio reaches 37 times, while Amazon's is only about 29 times.

In addition, Walmart's main business is still physical supermarkets, while Amazon's business landscape is far more diversified: it holds an industry-leading online retail business, with retail revenue achieving 13% growth in the first half; it is also the world's largest cloud service provider and owns a sizable film and television business; beyond that, there is the still-nascent Leo satellite project, aimed at competing with SpaceX in the satellite broadband market.

Taken together, Amazon, with a market capitalization of $2.8 trillion, appears to be undervalued.

You can do the math: referencing the valuation levels of emerging cloud vendors like CoreWeave and Nebius, combined with growth expectations over the next few years, the AWS cloud business alone could be worth at least $1 trillion, or even more.

The film and television studio business could at least be benchmarked against Netflix, which has a market capitalization of $300 billion.

Add to that the online retail segment, including merchant services, advertising, and membership subscription businesses; the deep interconnection among business segments also makes valuation calculations complex.

In the 12 months ending in June this year, online retail and merchant services revenue, excluding advertising and subscription businesses, reached $468 billion, growing at about 12%, and is expected to surpass $500 billion this year.

Based on Amazon's forward price-to-sales ratio of 3.3 times, the online retail segment is valued at about $1.7 trillion.

The advertising business currently generates annual revenue of $80 billion, growing at 20%-25% per year.

Although most of the revenue comes from platform merchants' promotional spending, and its valuation cannot match the advertising businesses of Meta and Google, it can still contribute enormous value to Amazon.

Other businesses also have upside potential.

At Goldman Sachs' recent Communicopia industry conference, technology analyst Eric Sheridan suggested that Amazon is poised to become a core beneficiary of the robotics wave.

Robotics technology can achieve more automation in logistics and delivery, boosting profit margins.

Of course, beyond the uncertainty of returns on AWS's massive capital expenditures, there are plenty of variables.

We still don't know exactly how much AI agents will change consumer behavior.

If a large number of users switch to AI agents and stop manually browsing Amazon's website, its advertising business could suffer a devastating blow.

It is undeniable that, as a large conglomerate, Amazon's stock has long carried a conglomerate discount, with its market capitalization always below the theoretical value of its businesses if they were split apart.

One day in the future, the company may split into two or three independent enterprises, with AWS being the most likely segment to be spun off.

However, that day is still far off; at this stage, AWS still needs the steady cash flow from the retail business to support its massive capital investment.

But the very possibility of a split itself offers opportunities for long-term investors.