Amazon vs Sea Limited: one is an AI stock, one isn't

The piece frames Amazon and Sea Limited as contrasting ways to own tech growth, with Amazon positioned as the AI beneficiary and Sea Limited as the non-AI operator. For Amazon, an unusual stretch stands out: $382 billion in first-half 2026 net sales, up 18% from the same period in 2025, yet $69 billion of its $92 billion profit came from investment gains, meaning net income barely grew excluding those gains. That investment-driven profit also skewed the P/E ratio down to 21, and the company posted a $7.6 billion free cash flow outflow over the trailing 12 months after decades of massive free cash flows, while pledging $220 billion in capital expenditures. That spending is treated as an investment that should make the upside worth the risk, with a 31 forward P/E that suggests a valuation well below historical levels.

Sea Limited, by contrast, is described as the non-AI version of Amazon through its e-commerce business Shopee, alongside the fintech enterprise Monee in Southeast Asia and the gaming company Garena, best known for Free Fire. All three segments are called recession-resistant. Its first-half 2026 revenue rose 47% year over year to $14.9 billion, with all three segments growing in the double digits, while net income of $896 million grew a more modest 9% annually as the company increased operating expenses to invest. Because it is not an AI company, it spent only about $793 million in capex over the trailing 12 months, and $4.9 billion in free cash flow over the same period suggests it can afford such investments. Significant stock declines over the last year are tied to those investments, with a 37 times earnings multiple and a forward P/E of 25.