Amazon's AI Growth Fuels Stock Rise, Nasdaq Predicted to Soar by 2026
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: Fool
- Market Potential: Analysts predict that the artificial intelligence market will grow from today's $300 billion to trillions, indicating significant investment opportunities over the next decade, which could drive the Nasdaq to soar in 2026.
- Amazon's Steady Performance: Despite only a 5% stock increase last year, Amazon's ongoing growth in e-commerce and cloud computing demonstrates its strong competitive position established before the AI boom, allowing it to maintain growth even if AI spending slows.
- AWS Revenue Growth: Amazon Web Services (AWS) has achieved an annual revenue run rate of $132 billion, leveraging in-house designed AI chips and the fully managed AI service Amazon Bedrock, showcasing its success in the AI sector and further solidifying Amazon's market position.
- Attractive Valuation: Amazon's stock trades at about 30 times forward earnings, down from over 50 times a few years ago, attracting investors who may prefer stocks with solid fundamentals amid concerns of an AI bubble, potentially driving its stock price higher in the new year.
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: 238.180
Low
250.00
Averages
294.71
High
340.00
Current: 238.180
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.
