Growth Potential of Amazon, MercadoLibre, and Chewy
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy AMZN?
Source: NASDAQ.COM
- Amazon's Operating Leverage: Amazon's e-commerce business has achieved operational leverage through AI and robotics, with North American operating income rising 24% on a 10% sales increase in Q4, demonstrating enhanced efficiency and profitability of its logistics network.
- Strong AWS Growth: Amazon Web Services (AWS) experienced a 24% revenue growth last quarter, and as capital expenditures ramp up for 2026, its data center capacity is expected to expand further, driving sustained growth in the future.
- MercadoLibre's Hidden Growth: MercadoLibre has grown its revenue by over 30% each quarter for the past seven years, with a remarkable 45% growth last quarter, leveraging its logistics advantage in Latin America and AI-driven ad revenue growth to attract more consumers.
- Chewy's Defensive Growth: Chewy derives over 80% of its sales from auto-ship pet food, and despite a P/E ratio of 16.5, its strong 8.4% sales growth and high-margin ad business position it as a valuable long-term investment in the market.
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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: 213.210
Low
175.00
Averages
280.01
High
325.00
Current: 213.210
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.
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- Same-Day Delivery Service: By providing same-day delivery, Amazon Pharmacy enables customers to conveniently obtain Zepbound KwikPen, addressing the market demand for rapid medication delivery and thereby improving customer experience.
- Diverse Medication Options: In addition to Zepbound, Amazon Pharmacy also offers FDA-approved GLP-1 medications, including Mounjaro, Wegovy, and Ozempic, further enriching its weight loss product line to meet varying customer needs.
- Market Reaction: Although Amazon's shares briefly rose on the news, they subsequently surrendered gains due to broader market weakness, indicating a cautious market sentiment regarding the impact of new product launches on future stock performance.
See More
Amazon to Address E-commerce Outages in Upcoming Meeting
- Frequent Outages: Amazon's e-commerce division plans to hold a meeting on Tuesday to address recent issues with site and infrastructure availability, particularly those related to AI coding tools, highlighting challenges in technology application.
- AI Usage Risks: An internal memo indicated that recent outages are linked to 'novel GenAI usage,' suggesting that risks associated with technology applications are increasing as best practices and safeguards are not yet fully established.
- Engineer Approval Process: To mitigate outages, Amazon will require junior and mid-level engineers to obtain sign-off from senior engineers for any AI-assisted changes, thereby enhancing oversight of technological modifications.
- Commitment to Improvement: Amazon stated that the review of website availability is 'part of normal business' and is committed to continuous improvement to enhance user experience and service quality.
See More
Big Tech Companies Ramp Up AI Hardware Investments
- Market Dominance: Taiwan Semiconductor Manufacturing (TSMC) holds a commanding 72% market share in the semiconductor industry, far surpassing Samsung Electronics at 7%, positioning it to benefit significantly from the surging demand for AI hardware.
- Strong Financial Performance: TSMC's revenue for 2025 reached $122.42 billion, a 35.9% year-over-year increase, with diluted earnings per share growing by 46%, showcasing robust profitability and cash flow that further solidifies its near-monopoly status.
- ASML's Unique Advantage: ASML is the sole supplier of extreme ultraviolet (EUV) lithography machines, achieving sales of €32.6 billion in 2025, up 15% from 2024, with a net profit margin of 29.42%, reflecting strong market demand and profitability.
- AI Investment Surge: With hundreds of billions allocated to AI hardware buildout, data center construction costs can reach $12 million per megawatt, making TSMC and ASML critical suppliers poised to play pivotal roles in the ongoing AI capital expenditure war.
See More
Tech Giants Ramp Up AI Investment
- Surge in Capex: Microsoft plans a 66% increase in capital expenditures to $37.5 billion for 2026, while Meta's spending is projected to reach between $162 billion and $169 billion, reflecting a robust commitment to AI investments.
- Semiconductor Market Dominance: Taiwan Semiconductor achieved $122.42 billion in revenue for 2025, a 35.9% year-over-year increase, capturing a 72% share of the global semiconductor market, underscoring its critical role amid rising AI hardware demands.
- Lithography Machine Monopoly: ASML remains the sole supplier of extreme ultraviolet (EUV) lithography machines, with 2025 sales totaling €32.6 billion, a 15% increase, and a net profit margin of 29.42%, highlighting its irreplaceable position in advanced chip production.
- AI Investment Outlook: As tech giants pour substantial funds into AI, Taiwan Semiconductor and ASML, as foundational infrastructure providers, are poised to play pivotal roles in the future of AI development, securing their market positions and profitability.
See More
Amazon Stock Edges Up Amid Zoox Robotaxi Expansion and UPS Strategy Shift
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- Significant Trading Volume: Trading volume reached 53.5 million shares, nearly 11% above the three-month average of 48.4 million shares, indicating strong market interest in Amazon's future, particularly amid volatile oil prices.
- Zoox Robotaxi Testing: Amazon's Zoox robotaxi service will be tested in Phoenix and Dallas using retrofitted SUVs, marking a significant step in the company's autonomous driving strategy, which is expected to enhance its competitiveness in the future mobility market.
- Market Volatility Impact: The sharp fluctuations in oil prices have affected the market, with investors concerned about UPS's strategy to reduce low-margin Amazon business, which could impact Amazon's delivery services and future profit margins, reflecting market apprehension about the company's profitability outlook.
See More
Amazon Stock Edges Up as Zoox Robotaxi Expansion Begins
- Stock Performance: Amazon closed at $213.49 on Monday, up 0.13%, as investors cautiously weighed the implications of Zoox's robotaxi expansion against UPS's strategic shift away from lower-margin Amazon parcels.
- Trading Volume Insights: The trading volume reached 53.5 million shares, nearly 11% above the three-month average of 48.4 million shares, indicating increased investor interest in Amazon's stock, which could influence short-term price volatility.
- Zoox Robotaxi Testing: Amazon's Zoox will roll out its robotaxi service for testing in Phoenix and Dallas, utilizing retrofitted SUVs for self-driving technology trials, marking a significant step in the company's autonomous driving ambitions that could enhance future service capabilities.
- Market Environment Impact: Volatile oil prices have affected market dynamics, with investors expressing concerns about how UPS's strategy to reduce low-margin Amazon business might impact Amazon's delivery services, reflecting apprehensions regarding the company's future margins.
See More
