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Amazon (AMZN) has performed exceptionally well over the last decade, returning close to 963.9% to investors. The company continues to dominate the e-commerce and cloud computing markets and has even diversified into digital entertainment, healthcare, logistics, and nuclear power.
However, the first quarter of 2025 has been marked by significant volatility for major tech stocks, including Amazon. Notably, fears of a potential recession, fueled by President Donald Trump’s aggressive trade policies and weak employment data, have caused major turmoil in the market.
These macroeconomic headwinds have caused Amazon’s stock to fall 10.5% this year, despite outstanding fourth-quarter results. However, according to the New York Post, some analysts see the downturn as a “textbook correction,” implying that the market may stabilize once permanent trade policies are established.
Let’s find out if Amazon can bounce back and reach its high target price of $306 this year.
Amazon’s Continued Efforts Could Propel Its Stock to Bounce Back
In the fourth quarter of 2024, net sales of $187.8 billion marked a 10% increase over the prior-year quarter. Net income surged to $1.86 per share, a year-over-year increase of 86%. For the full year 2024, Amazon’s net sales increased by 11% to $638 billion, while earnings increased by 83.8% to $5.33 per share.
Amazon Web Services (AWS), its cloud powerhouse, remains a key growth driver for the company. It has a 30% market share in the global cloud computing market, followed by Microsoft’s (MSFT) Azure and Alphabet’s (GOOG) Google Cloud. In 2024, AWS generated $107.6 billion in revenue, a 19% increase year on year. In the Q4 earnings call, management stated that AWS currently has an annualized revenue run rate of $115 billion.
Besides using AI to boost its cloud computing division, Amazon is using generative AI to reshape its retail business. AI-driven forecasting has improved demand predictions by 10%, while AI tools simplify the product listing process, reducing friction for sellers. Rufus, its AI Shopping Assistant, and Amazon Lens provide customers with an innovative retail experience. Amazon has also been incorporating robotics into its fulfillment network for years, with notable success in cost reduction, productivity enhancement, and improved workplace safety.
Amazon’s projected $100 billion capex for 2025 is expected to be heavily AI-focused, primarily benefiting AWS.
Management predicts first-quarter revenue will suffer an impact of $2.1 billion from currency headwinds and a $1.5 billion from the absence of the 2024 leap-year day. Revenue could be around $151 billion to $155.5 billion, in line with Wall Street’s estimates, reflecting an increase of 5% to 8% year-over-year. Analysts expect a 38.7% increase in earnings to $1.36 per share in the first quarter.
Looking ahead to the full year 2025, analysts predict Amazon’s revenue and earnings to increase by 9.6% and 14.5%. Furthermore, revenue and earnings are projected to increase by 10.4% and 19.7% in 2026. Trading at 26 times forward 2026 earnings, Amazon stock is currently attractively valued. The company has been investing heavily in AI technologies, aiming to enhance both its e-commerce and cloud services. These investments are expected to drive future growth and operational efficiencies.
What Is the Price Target for Amazon Stock?
Analysts remain optimistic about Amazon’s long-term trajectory, particularly its role in the burgeoning field of AI. Following its robust 2024 results, analysts at Barclays, Bank of America, Citi, and JMP Securities reaffirmed their “Buy” ratings on the stock. Separately, CFRA analyst Arun Sundaram upgraded Amazon stock from a “Buy” to a “Strong Buy.”
Overall, Amazon stock has earned a “Strong Buy” rating on Wall Street. Of the 50 analysts covering the stock, 45 have given it a “Strong Buy” rating, four recommend a “Moderate Buy,” and one has a “Hold” rating. The average target price is $268.66, indicating potential upside of 35.7% from its current price.
Additionally, the highest target price of $306 suggests the stock could rise by as much as 54.6% over the next 12 months.
The Bottom Line
Despite external headwinds, Amazon remains an unstoppable AI stock. With strong financials, e-commerce dominance, a rapidly expanding AI ecosystem, and a clear cost-cutting strategy, Amazon is well-positioned for another year of rapid growth in 2025.
As Wedbush analyst Dan Ives noted, Trump’s trade policies should stabilize in the coming months, which he believes will have no significant impact on the long-term trajectory of the AI revolution. I believe another strong quarter will cause Amazon’s stock to rebound and reach its high target price of $306 this year. The current dip could be an excellent opportunity to buy this high-growth stock.
