$AMZN · Invest with Henry · 2026-11-02

The third stock I use for "lead" options is Amazon. Amazon is much more than just an online shopping company , and you probably already know that. But business actually has several key drivers that most people don't really understand.

First and foremost, it is a huge e-commerce marketplace. You probably already understand that . But the second engine, AWS, is extremely powerful. Also, the third driver, which is its advertising activity.

They also have a subscription business, which is Amazon Prime. AWS leases computing, storage, and AI infrastructure capabilities to businesses around the world, while Amazon's advertising business allows brands to pay for exposure across Amazon's shopping system and other features.

This system is incredibly powerful because anyone who is on Amazon has a high purchase intent. They are shopping, so advertising is extremely expensive.

Now, moving on to AWS, this is the part of Amazon that I think is particularly interesting at the moment. In the third quarter, AWS revenue grew by more than 39% year-over-year to reach approximately 46 billion.

This is its fastest growth rate in about 5 years. AWS now operates with an annual revenue rate of approximately $ 184 billion. But AWS is not only growing rapidly, it is also very powerful and profitable.

AWS generated nearly $17.8 billion in operating income in just one quarter. Amazon as a whole achieved operating income of $28.1 billion and reached its highest operating margin ever.

Artificial intelligence has become a huge driver of this business activity. Every company that wants to build AI applications needs computing power, storage, networks, and access to sophisticated AI models.

Amazon can provide all of that through AWS. AWS recently signed agreements with companies including Meta, Nvidia, OpenAI, Salesforce, and Oracle.

Then there are Amazon's other businesses. The retail operation gives Amazon a massive infrastructure for consumer distribution and logistics. Prime creates a subscription system that keeps customers coming back.

Advertising gives Amazon another attractive business, because when

The bigger issue is the scale of their spending. Just like other tech giants such as Google , Amazon is projecting capital expenditures of around $ 220 billion in 2026, largely due to its massive investments in artificial intelligence infrastructure .

Free cash flow was significantly affected as a result.

Can Amazon turn its massive AI spending cycle into huge future profits ? If Amazon continues to grow at a rate close to its current rate, with improved retail margins and continued expansion of advertising, I believe Amazon has several different paths to success.

So, here's Amazon stock. I own 2,800 shares, which represent a total value of $679,000. I've talked a lot about Amazon in my Discord community , and I've made over $100,000 from Amazon.

So, this is an amazing stock that makes up a large part of my investment portfolio.

I want to show you what the "Leap" option on Amazon stock will look like. Currently , Amazon stock is trading at $242 per share . As for the "LEAP" option that I would choose , it would simply extend to 2027 and I would look at the expiration date in September.

I believe that entering in September gives us ample and excellent time to hold onto Amazon stock. You will have several quarterly earnings to see what the company is achieving, and I would choose an execution price of 235 here.

I will expand the options now. You can see that the bid and ask price difference here is not ideal. It's a little higher than I'd like. It exceeds $2.70. It's not ideal, but at the same time, when you go into a "leave" option because you're holding it for the long term, it's okay to have a completely illiquid bid-ask spread.

Good? The value of "delta" here is 0.63. A little less , but I expect a quick recovery for Amazon stock. I think this company could reach $280 per share. You can see here again that a price of 280 is not much higher than the breakeven point of 274.

Okay? But again, I won't keep this option until the expiration date. I have no real interest in keeping the cucumber until its expiration date because of the amount of "theta" it loses in the last 30 days.

Instead, my exit point from Amazon will simply be when the price reaches $280 per share, or I will manage this position in June 2027. The premium here is $40, which is equivalent to four thousand dollars.

Much less than having to buy 100 shares of Amazon at $23,500. So, this is a position I will open as soon as the market opens, and I will hold it for about 9 months or maybe a little longer.