Amazon (AMZN) shares have been in a freefall over the past two months as investors gauge the potential impact of President Donald Trump’s new tariffs on its core retail business.
Still, famed investor Cathie Wood continues to bet on a swift recovery in AMZN. Last week, the founder and chief executive of Ark Invest loaded up on 54,120 shares of the e-commerce giant for a total of about $9.3 million. Her purchases continue this week, with her funds snapping up shares as recently as April 7.
Amazon stock is currently down nearly 30% versus its year-to-date high in early February.
AI Investments Could Help Amazon Stock in 2025
On Tuesday, April 8, the Trump administration raised tariffs on Chinese imports to more than 100%, which is significant for AMZN given thousands of top sellers on its U.S. marketplace are from China.
Still, Cathie Wood remains bullish on Amazon stock primarily because it’s investing billions in artificial intelligence. In November, the company invested another $4.0 billion in Anthropic to strengthen its footing in the rapidly evolving AI landscape.
Additionally, Amazon stock is now trading at a super attractive valuation. The forward price-earnings multiple on the AI stock currently sits at about 30x versus its historical average of well over 50x.
AMZN’s Recent Initiatives Could Unlock Significant Upside
Wood favors investing in Amazon despite its management’s disappointing guidance for the current quarter in February.
The Seattle-headquartered firm expects its revenue to be capped at $155.5 billion in Q1. Analysts, in comparison, had called for $158.5 billion.
However, the company’s latest, AI-powered “Buy for Me” feature that lets users shop from third-party websites without having to leave the Amazon Shopping app could unlock significant upside in its share price, according to Nicholas Jones – a JMP Securities analyst.
Jones currently has a $285 price target on Amazon stock that indicates potential upside of about 65% from current levels.
What’s the Consensus Rating on Amazon?
Despite new tariffs and the related fears of an economic slowdown ahead, the rest of Wall Street remains positive on Amazon shares as well.
Analysts currently rate AMZN at “Strong Buy” with a mean target of $267 that indicates potential for about a 57% rally over the next 12 months.
