2024 was a blast for Amazon stock (AMZN).
The e-commerce giant saw its share price rally more than 44% on the back of strong corporate earnings, a dominant cloud computing business, and advancements in artificial intelligence.
The rally, however, is likely far from over.
Looking ahead to 2025, Wall Street analysts say Amazon’s e-commerce business will become more profitable, giving the company ample runway to continue investing in generative AI technology.
As Amazon CEO Andy Jassy explained, in the last 18 months, Amazon Web Services (AWS) “has released nearly twice as many machine learning and generative AI features as the other leading cloud providers combined.”
As Amazon becomes more profitable, analysts predict its share price should follow.
AMZN stock price predictions for 2025
| Forecaster | 2025 stock price prediction |
| Evercore ISI | $260 |
| TD Cowen | $265 |
| Bernstein | $265 |
| Truist Bank | $270 |
| JPMorgan | $280 |
One of the most compelling cases for Amazon’s continued dominance comes from Evercore ISI analyst Mark Mahaney, who believes the success of AWS will translate into stronger earnings for the company.
He called Amazon’s third-quarter earnings report a “profitability inflection point” for the company. Since then, “shares haven’t looked back [...] and we don’t think they will going forward either,” said Mahaney.
Amazon’s net sales surged by 11% to $158.9 billion in the third quarter, with net income improving to $15.3 billion, or $1.43 per diluted share. AWS sales jumped by 19% to $27.45 billion.
Against this backdrop, Evercore ISI has pegged AMZN’s stock at $260 in 2025—implying an 18% upside from current levels.
TD Cowen recently increased its 2025 price target for Amazon, from $240 to $265 per share, signaling a 21% upside from current prices.
Like Evercore, TD Cowen believes Amazon’s thriving AWS and advertising businesses will boost profitability next year. The investment bank also believes Amazon is a sleeping giant in AI, which is helping drive innovation across its e-commerce and advertising platforms.
As a revenue-generating machine, Amazon’s rising cash balance could be used to further deepen its investments in AI, TD Cowen said.
Equity research firm Bernstein also raised its price target for AMZN stock to match TD Cowen’s. Bernstein’s $265 target is 12% higher than its previous outlook, suggesting the company is poised to outperform the stock market next year.
In addition to its strong e-commerce business, Amazon’s ad revenue is forecast to grow up to 20% annually due to its scalability, said Bernstein.
Bernstein was encouraged by Amazon’s 2026 profit estimate, which called for earnings before interest and taxes to reach a staggering $99.6 billion. According to Bernstein, Amazon should be able to increase its operating profits by 11.4% by 2025.
Meanwhile, Truist Bank has maintained its buy rating for Amazon, giving the stock a price target of $270. Truist said the price target is justified following Amazon’s stellar third-quarter earnings report.
Although some analysts are concerned about Amazon’s growing capital expenditures—from $75 billion in 2024 to an estimated $90 billion in 2025—Truist said the company has earned the right to invest heavily.
A large chunk of that investment is going toward AI, which CEO Andy Jassy described as a “once-in-a-lifetime opportunity.”
“We’ve proven over time that we can drive enough operating income and free cash flow to make this a very successful return on invested capital business, and we expect the same thing will happen here with generative AI,” he said.
The most bullish forecast comes from JPMorgan, which recently revealed Amazon as one of its favorite stock picks for 2025. Analysts at the investment bank have raised their price target to $280, which means nearly 28% upside from current levels.
JPMorgan expects big things for Amazon’s artificial intelligence business in 2025 as the company moves toward dynamic “AI agents.” The AWS website has already talked up the value of AI agents in improving productivity and reducing costs.
3 things to watch next year
Over the years, Amazon has managed to compound its success by leveraging its in-house infrastructure to expand into other lucrative markets.
From e-commerce to advertising and cloud computing, the company has moved from strength to strength—and is now targeting artificial intelligence as its next growth driver.
While Amazon is well-positioned heading into 2025, its stock could be influenced by the following factors:
- E-commerce growth
- AI and cloud computing
- Economy and consumer spending
E-commerce growth
AWS and AI have dominated the headlines recently, but that shouldn’t subtract from Amazon’s e-commerce leadership.
As of the third quarter of 2024, Amazon’s online stores segment generated $242.02 billion in annual revenue. After crunching the numbers, this suggests that 39.1% of Amazon’s total business comes from e-commerce.
While it may be hard to imagine Amazon squeezing out more growth from its e-commerce platform, the company is trying to innovate its operations through AI-driven shopping tools and personalized recommendations.
This means more meaningful product recommendations for shoppers based on their current buying and browsing habits.
The company also hit the jackpot with the Amazon Prime subscription service. By 2024, it was estimated that there were 180 million Prime members in the United States—an increase from 168.5 million two years earlier. It’s estimated that 75% of all American Amazon shoppers are Prime members.
From the perspective of investors, Amazon must continue to deliver e-commerce engagement and revenue growth in 2025.
AI and cloud computing
It’s almost impossible to contain investors’ excitement about Amazon’s cloud business. Annual AWS revenue has increased for five consecutive quarters, reaching $27.45 billion in the third quarter as the unit’s profit margin reached the highest level in at least a decade.
By Q3, AWS’s 12-month revenue had reached a whopping $102.97 billion, accounting for 16.7% of company-wide revenues.
AWS revenue also increased by 19% year over year.
“AWS’ AI business is a multibillion-dollar revenue run rate business that continues to grow at a triple-digit, year-over-year percentage and is growing more than three times faster at this stage of its evolution as AWS itself grew,” CEO Andy Jassy said following the company’s Q3 financial results.
These figures have made Amazon the world’s largest cloud service provider, accounting for 31% of the total cloud market. That’s higher than Azure, Google Cloud, Oracle, and Salesforce.
The rise of generative AI has increased demand for AWS’s machine learning and artificial intelligence tools, which partly explains the company’s renewed focus on autonomous technologies.
In 2025, AWS is expected to remain a primary revenue driver for Amazon, fueled by enterprise cloud adoption, advancements in AI, and the growing demand for on-demand cloud solutions.
The company plans to allocate a large chunk of its $75 billion to $90 billion in capital expenditures toward enhancing AWS and its generative AI capabilities.
Economy and consumer spending
Despite being well-diversified, Amazon’s performance is still closely tied to consumer spending. This means its e-commerce business could be influenced by changes in the economy, inflation, and consumer spending.
A depressed consumer is less likely to spend big during holidays, which is a critical period for Amazon.
According to the latest estimates available, the U.S. e-commerce industry saw more than $211 billion in sales in 2023 alone. This figure likely grew in 2024 as consumers leaned on credit cards to make the holidays a reality.
The good news is that the U.S. economy doesn’t appear to be heading for a recession in the near future. The bad news is that inflation has proven stickier than previously expected, which has reduced the Federal Reserve’s appetite for rate cuts in 2025.