Alibaba Leads Year-to-Date Performance in Broadline Retail Stocks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 19 2025
0mins
Should l Buy AMZN?
Source: SeekingAlpha
Consumer Discretionary Sector Performance: The S&P 500 consumer discretionary sector has gained +7.2% year-to-date in 2025, underperforming compared to the overall S&P 500, which has a higher performance. The sector ranks eighth among 11 major sectors, while the State Street Consumer Discretionary Select Sector SPDR ETF (XLY) has increased by +9.1% YTD.
Top Performing Retail Stocks: Alibaba Group leads the top 10 broadline retail stocks with a YTD performance of +73.75%, followed by Kohl’s Corporation and Dillard’s, Inc. Other notable companies include Vipshop Holdings and Macy’s, with most stocks rated as 'Hold' in terms of Quant Rating.
Amazon's Performance: Amazon.com ranks last among the listed stocks with a YTD performance of +3.36%, but it holds the highest Quant Rating of 'Strong Buy 4.94', indicating strong investor confidence despite its lower performance.
Additional Consumer Discretionary ETFs: The article mentions several consumer discretionary ETFs, including XLY, VCR, FXD, FDIS, RSPD, and RXI, suggesting a variety of investment options within the sector.
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Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise
44 Analyst Rating
41 Buy
3 Hold
0 Sell
Strong Buy
Current: 207.240
Low
175.00
Averages
280.01
High
325.00
Current: 207.240
Low
175.00
Averages
280.01
High
325.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Amazon's E-Commerce Potential Underappreciated Amid AI Concerns
- E-Commerce Profit Potential: Amazon's North American retail division achieved a 6.9% profit margin last year, indicating strong profitability in its e-commerce business, with expectations of easily reaching 10% and potentially 15% in the coming years.
- Advertising Growth: The growth in higher-margin segments like advertising is expanding Amazon's overall profit pool, and while investments in new projects may compress margins in the short term, they are expected to create long-term value.
- Low Stock Valuation: Amazon's current P/E ratio of 28.5 is among its lowest historically, reflecting the market's underestimation of its future profit potential, especially as retail could reach $750 billion in revenue in the next few years.
- Importance of Cost Control: Amazon must maintain cost discipline over the next decade to ensure steady growth in its international market revenue of $162 billion, which will drive overall profitability improvements.
See More
Amazon's Heavy Investment in AI Infrastructure
- Revenue Growth Potential: Amazon Web Services (AWS) achieved a 24% revenue growth last quarter and is expected to accelerate in the coming year, with management projecting revenue growth from $129 billion to $600 billion by 2036, indicating strong market demand and long-term profitability.
- Retail Division Performance: Amazon's retail segment grew revenue by 10% year-over-year in North America, with a profit margin of 6.9% over the past 12 months, showcasing ample room for continued expansion, particularly driven by advertising, third-party seller services, and subscriptions.
- Operating Margin Improvement: Amazon's consolidated operating margin reached a record high of 11.8%, and if it can expand to 15% while revenue grows to $1 trillion, it is projected to generate $150 billion in operating earnings in the coming years, enhancing its investment appeal.
- Market Value Assessment: With a market capitalization of $2.2 trillion, Amazon's stock is viewed as a good value; despite current investor concerns over cash flow pressures from heavy investments, long-term holders are expected to reap substantial rewards.
See More
Stocks May Be Cheap Enough for Investors to Buy
- Valuation Decline: The S&P 500's forward P/E ratio has dropped to 19.7, just below the five-year average of 20.1, indicating that the market is at a historical low, which may attract investors and improve market sentiment.
- Geopolitical Impact: The U.S.-Iran conflict has driven crude oil prices up, raising inflation expectations; however, Rubner notes that when the forward P/E falls below 20, future returns tend to be favorable, potentially providing opportunities for investors.
- Market Rebound Signs: Stocks surged on Monday after President Trump signaled progress toward ending the war, and although major indices fell on Tuesday, futures pointed to sharp gains on Wednesday, suggesting a potential market turnaround.
- Investment Strategy Recommendations: Rubner highlighted several bullish options trades in technology stocks, particularly in Nvidia, Amazon, Alphabet, and Apple, leveraging the risk-limiting features of call options to help investors capitalize on opportunities in a volatile market.
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Amazon's AI Investment Outlook Remains Positive
- Price Target Increase: Citi Research raised Amazon's price target from $265 to $285, implying about a 27% upside from Tuesday's close, reflecting confidence in the company's future growth prospects.
- AWS Revenue Projections: Analysts expect Amazon Web Services (AWS) revenue to grow 28% year-over-year in Q1 2026 and accelerate to 37% growth in 2027, primarily driven by partnerships with OpenAI and Anthropic.
- Compute Capacity Expansion: AWS is on track to double its compute capacity by 2027, potentially reaching around 24 gigawatts, which will enhance its competitiveness in the rapidly growing AI market.
- Market Confidence Boost: Despite a 10% decline in Amazon's stock price since the beginning of the year, 65 out of 69 analysts maintain a buy or strong buy rating, indicating strong market recognition of its long-term investment value.
See More
Citi Raises Amazon Price Target to $285 on AI Revenue Boost
- Price Target Increase: Citi raised Amazon's (AMZN) price target from $265 to $285, reflecting increased confidence in Amazon Web Services' (AWS) revenue projections driven by AI, indicating strong market sentiment towards Amazon's growth prospects.
- AWS Revenue Growth Forecast: Analysts project AWS revenue growth of 28% year-over-year in Q1 2026, 29% for 2026, and accelerating to 37% in 2027, demonstrating that Amazon's partnerships in AI are significantly enhancing its revenue trajectory.
- Significant AI Revenue Contribution: AI revenue is expected to account for 58% of AWS's incremental revenue in 2026 and 72% in 2027, indicating Amazon's strengthening competitive position in the AI market despite concerns over ROI and cash flow visibility.
- Partnership Potential: Analysts noted that partnerships with Anthropic and OpenAI could contribute approximately $18 billion and $31 billion to AWS revenue in 2026 and 2027, respectively, highlighting Amazon's strategic positioning in AI infrastructure and future growth opportunities.
See More
Latest Rating Changes on Wall Street
- Tesla Neutral Rating: Goldman Sachs maintains a neutral stance on Tesla, expressing caution regarding its semiconductor ventures, noting a mixed track record in semiconductor engineering, while suggesting potential applications for inference chips in data centers and distributed computing remain to be seen.
- Upgrade Based on Iran War: Wells Fargo upgrades Kinetik, ONEOK, and Enterprise Products Partners from equal weight to overweight, anticipating that the Iran war will create a structural shift in global energy markets, boosting demand for U.S. energy, particularly in Permian gas and NGL supply.
- ESCO Technologies Buy Initiation: Deutsche Bank initiates coverage on ESCO Technologies with a Buy rating and a $350 target price, highlighting its potential for “defensive growth at a discount” in the aerospace and defense sectors, indicating strong confidence in the company's future.
- Arm Rating Upgrade: Wolfe upgrades Arm from market perform to outperform, citing the company's recent in-house chip launch and significantly increased earnings forecasts for FY28 and FY31, setting a target price of $166, reflecting optimism about its new business model.
See More
Amazon's E-Commerce Potential Underappreciated Amid AI Concerns
- E-Commerce Profit Potential: Amazon's North American retail division achieved a 6.9% profit margin last year, indicating strong profitability in its e-commerce business, with expectations of easily reaching 10% and potentially 15% in the coming years.
- Advertising Growth: The growth in higher-margin segments like advertising is expanding Amazon's overall profit pool, and while investments in new projects may compress margins in the short term, they are expected to create long-term value.
- Low Stock Valuation: Amazon's current P/E ratio of 28.5 is among its lowest historically, reflecting the market's underestimation of its future profit potential, especially as retail could reach $750 billion in revenue in the next few years.
- Importance of Cost Control: Amazon must maintain cost discipline over the next decade to ensure steady growth in its international market revenue of $162 billion, which will drive overall profitability improvements.
See More
Amazon's Heavy Investment in AI Infrastructure
- Revenue Growth Potential: Amazon Web Services (AWS) achieved a 24% revenue growth last quarter and is expected to accelerate in the coming year, with management projecting revenue growth from $129 billion to $600 billion by 2036, indicating strong market demand and long-term profitability.
- Retail Division Performance: Amazon's retail segment grew revenue by 10% year-over-year in North America, with a profit margin of 6.9% over the past 12 months, showcasing ample room for continued expansion, particularly driven by advertising, third-party seller services, and subscriptions.
- Operating Margin Improvement: Amazon's consolidated operating margin reached a record high of 11.8%, and if it can expand to 15% while revenue grows to $1 trillion, it is projected to generate $150 billion in operating earnings in the coming years, enhancing its investment appeal.
- Market Value Assessment: With a market capitalization of $2.2 trillion, Amazon's stock is viewed as a good value; despite current investor concerns over cash flow pressures from heavy investments, long-term holders are expected to reap substantial rewards.
See More
Stocks May Be Cheap Enough for Investors to Buy
- Valuation Decline: The S&P 500's forward P/E ratio has dropped to 19.7, just below the five-year average of 20.1, indicating that the market is at a historical low, which may attract investors and improve market sentiment.
- Geopolitical Impact: The U.S.-Iran conflict has driven crude oil prices up, raising inflation expectations; however, Rubner notes that when the forward P/E falls below 20, future returns tend to be favorable, potentially providing opportunities for investors.
- Market Rebound Signs: Stocks surged on Monday after President Trump signaled progress toward ending the war, and although major indices fell on Tuesday, futures pointed to sharp gains on Wednesday, suggesting a potential market turnaround.
- Investment Strategy Recommendations: Rubner highlighted several bullish options trades in technology stocks, particularly in Nvidia, Amazon, Alphabet, and Apple, leveraging the risk-limiting features of call options to help investors capitalize on opportunities in a volatile market.
See More
Amazon's AI Investment Outlook Remains Positive
- Price Target Increase: Citi Research raised Amazon's price target from $265 to $285, implying about a 27% upside from Tuesday's close, reflecting confidence in the company's future growth prospects.
- AWS Revenue Projections: Analysts expect Amazon Web Services (AWS) revenue to grow 28% year-over-year in Q1 2026 and accelerate to 37% growth in 2027, primarily driven by partnerships with OpenAI and Anthropic.
- Compute Capacity Expansion: AWS is on track to double its compute capacity by 2027, potentially reaching around 24 gigawatts, which will enhance its competitiveness in the rapidly growing AI market.
- Market Confidence Boost: Despite a 10% decline in Amazon's stock price since the beginning of the year, 65 out of 69 analysts maintain a buy or strong buy rating, indicating strong market recognition of its long-term investment value.
See More
Citi Raises Amazon Price Target to $285 on AI Revenue Boost
- Price Target Increase: Citi raised Amazon's (AMZN) price target from $265 to $285, reflecting increased confidence in Amazon Web Services' (AWS) revenue projections driven by AI, indicating strong market sentiment towards Amazon's growth prospects.
- AWS Revenue Growth Forecast: Analysts project AWS revenue growth of 28% year-over-year in Q1 2026, 29% for 2026, and accelerating to 37% in 2027, demonstrating that Amazon's partnerships in AI are significantly enhancing its revenue trajectory.
- Significant AI Revenue Contribution: AI revenue is expected to account for 58% of AWS's incremental revenue in 2026 and 72% in 2027, indicating Amazon's strengthening competitive position in the AI market despite concerns over ROI and cash flow visibility.
- Partnership Potential: Analysts noted that partnerships with Anthropic and OpenAI could contribute approximately $18 billion and $31 billion to AWS revenue in 2026 and 2027, respectively, highlighting Amazon's strategic positioning in AI infrastructure and future growth opportunities.
See More
Latest Rating Changes on Wall Street
- Tesla Neutral Rating: Goldman Sachs maintains a neutral stance on Tesla, expressing caution regarding its semiconductor ventures, noting a mixed track record in semiconductor engineering, while suggesting potential applications for inference chips in data centers and distributed computing remain to be seen.
- Upgrade Based on Iran War: Wells Fargo upgrades Kinetik, ONEOK, and Enterprise Products Partners from equal weight to overweight, anticipating that the Iran war will create a structural shift in global energy markets, boosting demand for U.S. energy, particularly in Permian gas and NGL supply.
- ESCO Technologies Buy Initiation: Deutsche Bank initiates coverage on ESCO Technologies with a Buy rating and a $350 target price, highlighting its potential for “defensive growth at a discount” in the aerospace and defense sectors, indicating strong confidence in the company's future.
- Arm Rating Upgrade: Wolfe upgrades Arm from market perform to outperform, citing the company's recent in-house chip launch and significantly increased earnings forecasts for FY28 and FY31, setting a target price of $166, reflecting optimism about its new business model.
See More
