Amazon (AMZN) had a phenomenal 2024, hitting an all-time high stock price of $233 and outpacing the S&P 500 (SPX) with a 50% gain. As we enter 2025, the key question is whether Amazon can keep up this momentum. Well, I think we all know the answer is a resounding yes!
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However, it’s still worth exploring why the answer is so obvious, so let’s examine four factors supporting our optimistic outlook for Amazon in 2025. If you wish to read more about Amazon, you can read what our analyst at Tipranks, Devia Lohia, wrote in depth about AMZN stock.
AI-Driven AWS Growth
Amazon Web Services (AWS) continues to be the crown jewel of Amazon’s empire. In Q3, AWS sales climbed 19.1% year-over-year, reaching a whopping $27.5 billion. The increasing demand for AI solutions largely drives this growth. AWS’s operating income also grew considerably, jumping 48.6% year-over-year. With Amazon’s ambitious AI roadmap, including developing a supercomputer powered by its Trainium chips, AWS is set to remain a key asset for the long term.
E-Commerce and Digital Advertising
Amazon’s e-commerce business is a long-lasting superstar thanks to its robust Prime membership base of over 200 million subscribers. Despite a competitive industry with many big players attending, Amazon holds over 30% of the U.S. market share. In Q3, the North American retail segment posted a 9% revenue increase and a 31% growth in operating income. Amazon’s digital advertising business is also generating wealth, with Q3 advertising revenues up 19%. This segment has contributed over $50 billion in revenue over the past year!
Expansion into Pharmacy Services
I guess it was always a matter of time before Amazon expanded to other lucrative business segments, so why not pharmaceuticals? AMZN plans to expand its Amazon Pharmacy Same-Day Delivery service to nearly half the U.S. population and open new pharmacy locations in 20 additional cities. This move highlights the company’s goal to diversify its offerings and margins.
Tipranks’ Smart Score
Amazon boasts an impressive Smart Score of 9 on TipRanks, based on analyzing eight unique data sets, including analyst recommendations, crowd wisdom, and hedge fund activity. This high score indicates strong bullish sentiment, which for investors means Amazon is seen as a solid investment with additional growth potential.
What Is the Price Target for AMZN?
On Wall Street, Amazon is a Strong Buy. The average price target for AMZN stock is $248.90, suggesting a 9.35% potential upside.
