Amazon.com has long been a favourite among investors, boasting one of the most impressive growth trajectories in stock market history. However, 2025 has presented some challenges, with the stock experiencing a notable downturn. Despite these short-term struggles, Amazon remains a dominant force in retail, cloud computing, artificial intelligence (AI), and entertainment. So, where is Amazon stock headed in the next year? Let’s dive into the factors that could influence its performance.
Amazon’s Recent Stock Performance
Amazon stock has mirrored the broader Nasdaq’s recent struggles, with AMZN shares dropping -13.93% over the past month. Since hitting a six-month high in December 2024, the tech-heavy Nasdaq has also fallen -12.38%. Year-to-date, Amazon has lost -11.31%, raising questions about whether it can regain its upward momentum.
Why Amazon Remains a Strong Investment
Despite the recent volatility, Amazon’s long-term track record speaks for itself. Over the past 20 years, AMZN stock has surged more than 8,739%, cementing its reputation as one of the most influential companies in the world. As a member of the “Magnificent 7” tech stocks, Amazon has seen remarkable highs, with analysts still predicting strong future performance.
Amazon’s Key Growth Drivers
Amazon’s vast business empire spans multiple high-growth sectors, reinforcing its resilience:
- Retail & E-commerce: Amazon remains a global e-commerce leader, continually expanding its same-day delivery services.
- Amazon Web Services (AWS): AWS dominates the cloud computing space and continues to drive revenue growth.
- Artificial Intelligence: Amazon is investing heavily in AI, with updates to Alexa+ and the development of its Nova chatbot, a potential competitor to ChatGPT.
- Entertainment & Media: Amazon Prime Video’s acquisition of MGM Studios secures the James Bond franchise and enhances its entertainment offerings.
- Advertising: Amazon’s rapidly growing digital ad business is another significant revenue driver.
With these revenue streams in play, analysts believe Amazon’s stock is well-positioned for long-term growth.
Analyst Predictions: Where Will AMZN Stock Be in 2025?
Wall Street Ratings and Price Targets
Out of 47 analysts covering AMZN, all but one recommend a Buy rating, with the remaining analyst giving it a Hold rating. Loop Capital and Wells Fargo recently reiterated their buy-equivalent ratings, reinforcing strong investor confidence.
The current consensus price target sits at $270.33, which is higher than Amazon’s all-time high, signaling strong upside potential. However, while most analysts anticipate growth, some caution that macroeconomic factors could present challenges.
Potential Risks & Challenges
Amazon isn’t without its headwinds. Investors should keep an eye on the following risks:
- Consumer Spending Slowdown: Inflation and recession fears may impact retail sales.
- Rising AI and Cloud Costs: Increased AI and cloud computing investments could pressure margins.
- Intense Competition: Amazon competes with retail giants like Walmart and Alibaba, as well as tech leaders like Microsoft and Netflix.
- Labour Disputes: Ongoing unionisation efforts and workforce challenges could increase operational costs.
Should You Trade Amazon Stock in 2025?
While Amazon’s short-term volatility has raised concerns, the company’s long-term growth potential remains solid. With a strong consensus Buy rating, institutional investors like Vanguard, BlackRock, and State Street holding substantial stakes, and multiple growth drivers in play, Amazon appears well-positioned for future gains.
Investors should monitor key developments, including AI advancements, AWS performance, and macroeconomic trends, to assess Amazon’s trajectory. For long-term investors, the current dip could present a compelling buying opportunity.
Bottom Line
Amazon’s stock may face near-term fluctuations, but its strong fundamentals, diversified revenue streams, and Wall Street backing suggest a promising future. If you’re looking for a stock with long-term growth potential, AMZN remains a top contender in the tech and e-commerce space.
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