Amazon (AMZN) is being tipped to grow its revenue from generative AI (GenAI) to the tune of around $50 billion in the next five years thanks, partly at least, to Americans’ love of music.
GenAI Will Soar
According to five-star TipRanks-rated analyst John Blackledge of TD Cowen, Amazon’s launch of a GenAI-powered Alexa+ assistant this week underscored its efforts across its Amazon Web Services, eCommerce, and advertising businesses. He now expects AWS’s generative AI revenue of $7.1 billion in 2025 to soar to $56.3 billion in 2030.
Blackledge noted that TD Cowen had also carried out a consumer survey on Amazon, generative AI and Alexa+ this week. It found that consumers were likely to give a positive reaction to the souped-up new Alexa given their extensive usage of and engagement with the product.
The survey discovered that 80% of Echo Device owners interact with Alexa at least once per day. An Echo Device is a smart speaker developed by Amazon which connects to Alexa.
Of the 35% of Echo device owners in the survey, 56% interacted with their device multiple times in a day, while another 24% do the same once per day. Just over a quarter of Echo Device owners made a purchase with Alexa on Christmas Eve, with the same number buying directly through their device in the last 30 days.
Alexa+ Should Lift Demand
“Alexa+ should make it easier to make purchases directly through voice, with capabilities including ‘Experts’ that can complete tasks across partner platforms,” said Blackledge. This includes Amazon-owned properties such as Whole Foods/Amazon Fresh, Amazon Music, and Ring, as well as third-party partners including Uber Technologies (UBER), Xbox, and Sonos.
Aside from making purchases, respondents were asked to identify what they have used their Echo device for in the past month. Most said that they used Alexa to listen to music, request information and control home settings.
Is AMZN a Good Stock to Buy Now?
On TipRanks, AMZN has a Strong Buy consensus based on 47 Buy and 1 Hold rating. Its highest price target is $306. AMZN stock’s consensus price target is $268.91 implying an 29.21% upside.
