In a regulatory filing published on Wednesday, Warren Buffett's Berkshire Hathaway (NYSE:BRK-B) (NYSE:BRK-A) revealed an increased stake in Amazon.com (NASDAQ:AMZN). While the position implies a level of confidence in the stock's long-term potential, investors should think twice before they jump the gun and buy Amazon just because Berkshire bought shares.

Nevertheless, Amazon is starting to look undervalued in its own right. Shares have tumbled over the past 30 days, driven both by a sell-off in the overall stock market and a disappointing earnings report in late July.

Boxes in an Amazon fulfillment center

Image source: Amazon.com.

Berkshire clicks the buy button on Amazon stock

Berkshire started buying stock in the cloud-computing and e-commerce giant in the first quarter of 2019. The company bought 483,300 shares of Amazon at the time. But Berkshire owned 537,300 shares as of the end of its second quarter, according to the holding company's most recent filing with the Securities and Exchange Commission. This means Berkshire added 54,000 shares to its Amazon holding.

The company's total stake in Amazon is now worth $957 million as of this writing.

But investors should keep in mind that the new shares weren't likely the Oracle of Omaha's doing. When Berkshire first revealed its stake in Amazon in May, Buffett clarified that the purchases were made by one of his two investment lieutenants, Todd Combs and Ted Weschler, each of whom was managing over $13 billion at the time. With this stake only increasing by 11% in Q2, these purchases are likely still too small to be Buffett's.

The Berkshire CEO did admit in an interview with CNBC in May, though, that he has been "a fan" of the company and had "been an idiot for not buying it" earlier.

Investors should also note that this investment, at less than $1 billion, is small in comparison to the company's biggest bets on equities. Buffett, for instance, has a stake in Apple that's worth more than $50 billion. Furthermore, the company has 24 holdings each worth more than $1 billion, with five valued at more than $15 billion each.

Amazon shares are looking attractive

While famed investor Warren Buffett may not be personally clicking the buy button on Amazon stock, this doesn't mean shares aren't compelling.

The stock is down about 12% over the past 30 days. Part of this decline came when the company's second-quarter earnings per share missed analyst estimates. Of the rest of the stock's slide, most has been due to bearishness in the overall market.

A look at Amazon's underlying business momentum suggests that the market may be overreacting recently. Though the company's market capitalization of about $880 billion may scare some investors away, Amazon is still growing at impressive rates. Its trailing-12-month sales are up 23% year over year when excluding the impact of foreign exchange rates. In addition, earnings per share over this same time frame rose 91% to $24.15.

Strong earnings growth should continue in the coming years, as Amazon has recently been benefiting significantly from economies of scale. Its trailing-12-month operating margin expanded from 3.5% for the period ending June 30, 2018, to 6% in the period ending June 30, 2019.

Could one of Berkshire's investment lieutenants be onto something?