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Amazon (AMZN) is among the largest companies globally and is a major player in multiple markets, including e-commerce, public cloud, and online advertising. The big tech giant is now looking to gain traction in verticals such as artificial intelligence and quantum computing, which should diversify its revenue and cash flow over time.
Let’s see if you should own shares of this quantum computing stock right now.
Is This Quantum Computing Stock a Good Buy in April 2025?
The Amazon Web Services business has positioned itself as a frontrunner in the quantum computing landscape. In 2025, Amazon unveiled the Ocelot quantum chip, which uses an innovative “cat qubit” design inspired by Schrödinger’s famous thought experiment. The 9-qubit prototype chip reduces error correction costs by 90% compared to traditional approaches.
While Ocelot features fewer qubits than competitors like Google's (GOOG) (GOOGL)105-qubit Willow chip, Amazon’s focus on integrating error correction directly into the architecture could accelerate practical quantum computing applications by half a decade.
On the service side, Amazon Braket has emerged as a leading quantum computing as a service (QCaaS) platform. This segment offers users access to various quantum computing technologies, including superconducting qubits, trapped ions, and photonic systems. Moreover, the integration of Claude 3 with Braket has streamlined quantum algorithm development.
A report from The Quantum Insider expects the QCaaS market to reach $26 billion by 2030, accounting for over 40% of the quantum computing market. Rising commercial adoption and the expansion of services by AWS, Google, and Microsoft (MSFT) should be key drivers for the QCaaS market.
Amazon Focuses on Cost Savings
In its recent earnings call, Amazon highlighted its progress on cost savings as its operating income grew by 61% year-over-year to $21.2 billion in Q4. Amazon explained that its cost-savings effort is centered around its fulfillment network, allowing the company to reduce the global cost-to-serve on a per-unit basis for the second consecutive year.
Package consolidation has emerged as another key efficiency driver. For instance, Amazon has optimized the number of items shipped in the same package and reduced packaging materials, which increases customer convenience. Its investments in robotics and automation are also powering productivity gains, driving the bottom line higher.
Amazon’s growth story is from over, given its ad business grew by 18% year-over-year to $17.3 billion in Q4. In 2024, ad sales stood at $69 billion, up from $29 billion in 2020. AWS remains a profit powerhouse with 19% revenue growth and $10.6 billion in operating income. The segment benefits from operational efficiencies and strong demand for AI services, which now generate billions in annualized revenue and are growing at triple-digit rates.
Looking ahead to 2025, Amazon plans to extend these cost-saving initiatives through further inventory placement refinement, same-day delivery network expansion, and accelerated implementation of robotics and automation throughout its fulfillment network—all while continuing to improve the customer experience.
Is AMZN Stock Undervalued?
Analysts expect Amazon to grow its revenue from $638 billion in 2024 to $1.02 trillion in 2029. In this period, its adjusted earnings are forecast to expand from $5.53 per share to $13.63 per share. Moreover, free cash flow is projected to improve from $38.2 billion to $150.6 billion.
If the tech stock is priced at 25x forward earnings, it should gain over 80% in the next four years. Out of the 53 analysts covering AMZN stock, 48 recommend “Strong Buy,” four recommend “Moderate Buy,” and one recommends “Hold.” The average target price for AMZN stock is $263.37, up 42% from current prices.
