Amazon's 2025 Growth Lags, Yet Remains a Strong Investment
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
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Source: Fool
- Amazon Performance Analysis: In 2025, Amazon's stock rose only 5.5%, significantly trailing the S&P 500's 17.3% gain, indicating the impact of slowing consumer spending on its e-commerce segment, although AWS's operating income now exceeds that of the rest of the business combined, highlighting improved profitability.
- Profitability Enhancement: Amazon maintains positive free cash flow, with earnings growth outpacing stock price increases, currently trading at a forward P/E of 32.8, nearly identical to Apple's 33.2, reflecting market underestimation of its future growth potential.
- Netflix Uncertainty: Despite significant gains in 2023, Netflix's stock has dropped 29% in the last six months due to uncertainties surrounding its acquisition of Warner Bros., while rising operating expenses outpace revenue growth, impacting future earnings expectations.
- Visa's Market Position: As the largest payment processor in the U.S. with a market cap of $671 billion, Visa's stock trades at a reasonable 27.7 times forward earnings, demonstrating strong profitability and market appeal amid economic growth and the shift towards digital transactions.
Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AMZN is 294.71 USD with a low forecast of 250.00 USD and a high forecast of 340.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
43 Analyst Rating
40 Buy
3 Hold
0 Sell
Strong Buy
Current: 230.820
Low
250.00
Averages
294.71
High
340.00
Current: 230.820
Low
250.00
Averages
294.71
High
340.00
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.
