Amazon's AI Business Boosts Stock, Nasdaq Predicted to Soar by 2026
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2d ago
0mins
Source: NASDAQ.COM
- Massive Market Potential: Analysts predict that the AI market will grow from today's $300 billion to trillions in the coming years, indicating strong growth potential that could drive the Nasdaq significantly higher by 2026.
- Amazon's Diversification Advantage: Despite only a 5% stock increase last year, Amazon's robust growth in e-commerce and cloud computing allows it to rely on other business segments for growth if AI spending slows, enhancing investor confidence.
- Strong AWS Performance: Amazon Web Services (AWS) has achieved an annual revenue run rate of $132 billion by offering AI chips and platforms, indicating that its success in AI will further boost overall company performance and solidify its market leadership.
- Attractive Valuation Draws Investment: With a current price-to-earnings ratio of about 30, down from over 50 a few years ago, Amazon's reasonable valuation may attract investors looking for stable investments amid growing concerns about an AI bubble.
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 294.69 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.
47 Analyst Rating
46 Buy
1 Hold
0 Sell
Strong Buy
Current: 238.180
Low
250.00
Averages
294.69
High
340.00
Current: 238.180
Low
250.00
Averages
294.69
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.
