AMZN Stock To $400?
CHONGQING, CHINA - APRIL 26: In this photo illustration, the logo of Amazon.com, Inc. is displayed ... More on a smartphone screen, with the company's iconic smile branding visible in the background, on April 26, 2025, in Chongqing, China. (Photo illustration by)
Amazon's stock has already delivered impressive gains, rising over 150% from $85 levels in early 2023 to around $210 now. But what could propel the stock to double from current levels over the next few years? The answer lies in AWS and AI – the primary growth engine for Amazon.
AWS remains Amazon's most lucrative segment and the key catalyst for future stock appreciation. AWS revenue growth of 19% year-over-year in 2024 and 17% in Q1'25 was strong, and it is expected to remain in high teens in the near term. The artificial intelligence boom is driving accelerated demand for cloud computing services, with enterprises turning to AWS to leverage AI capabilities quickly. Separately, if you are looking for an upside with a smoother ride than an individual stock, consider the High Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception. Also, see – Should You Buy RKLB Stock At $33?
Amazon is making a significant investment in its AI infrastructure. In 2024, the company spent approximately $75 billion on capital expenditures, and CEO Andy Jassy expects this to exceed $100 billion in 2025. This substantial investment is largely driven by the increasing demands of generative AI.
Recently, Amazon further underscored its commitment by announcing plans to invest $54 billion in the UK over the next three years. This investment aims to expand both its warehouse network and artificial intelligence infrastructure, bolstering its e-commerce and cloud operations.
AWS revenue reached $108 billion in 2024, representing 17% of Amazon's total revenues. However, the segment's high margins establish it as Amazon's primary profit driver. Continued double-digit growth in AWS could significantly increase the company's overall valuation. For perspective, AWS alone accounted for an estimated 40% of Amazon's total EBITDA in 2024.
How Does Amazon Benefit From These Investments?
Amazon's AI investments create a multiplier effect across all business segments. In e-commerce, AI will help enhance recommendation engines, optimize logistics networks, and improve inventory management, driving higher conversion rates and operational efficiency.
For advertising, AI will likely enable more precise targeting and dynamic pricing, increasing ad effectiveness and commanding premium rates. These cross-segment AI benefits compound revenue growth while reducing operational costs, creating a virtuous cycle of scaling revenues and expanding margins.
Revenue Acceleration
Amazon's advertising business has become a significant revenue generator, hitting $56.2 billion in 2024, marking its first time exceeding $50 billion annually. This was a 20% increase year-over-year. The strong momentum continued into Q1 2025, with advertising revenue reaching $13.9 billion, a 19% increase compared to the previous year.
Amazon's unique position as both a marketplace and a media platform gives its advertising business a significant advantage. The recent introduction of ads on Prime Video has expanded ad inventory, while the company's extensive e-commerce data offers powerful targeting capabilities for advertisers.
While attention often focuses on AWS and advertising, Amazon's foundational e-commerce business remains a substantial revenue source. Last year, the online stores segment brought in $247 billion in annual revenue, accounting for 39% of Amazon's total business. This strong base provides consistent cash flow, enabling Amazon to fund growth investments in its higher-margin segments like AWS and advertising.
Path To 2x Growth
For Amazon's stock to double, the company needs to show consistent growth across its key businesses. This growth will likely be fueled by AWS's AI-driven expansion, the rapid increase in advertising revenue, and the stability of its e-commerce operations.
Key factors that could drive stock appreciation include AWS consistently growing above 20%, advertising revenue reaching $80-90 billion annually (expected within 2-3 years), and improved operating margins as AI investments start paying off. Amazon's substantial AI infrastructure investments strategically position it to capture a significant share of the emerging AI market.
Looking at the numbers, we project Amazon's revenues to exceed $900 billion in the next three years, with earnings nearly doubling from 2024 to over $10 per share. Currently, with AMZN stock trading around $210, it's valued at approximately 39 times trailing adjusted earnings. If it maintains a similar valuation, the stock could surpass $400 within the next three years. Should investors assign an even higher multiple, it would imply more than a two-fold growth.
Amazon's diverse revenue streams and leadership in cloud computing, e-commerce, and digital advertising offer multiple avenues for sustained growth. This revaluation, coupled with fundamental business growth, provides the basis for the stock to double, reflecting sustained revenue increases and a reassessment of Amazon's long-term earnings potential in the AI economy. Amazon's diversified revenue streams and leadership in cloud computing, e-commerce, and digital advertising provide multiple pathways for sustained growth. If these segments continue their current trajectories, the stock could potentially double from here, driven by both revenue growth and margin expansion as AI investments mature.
The convergence of scaling revenues across all segments and improving profitability from AI-driven efficiencies could fuel significant investor optimism. As Amazon demonstrates its ability to monetize massive AI investments while maintaining market leadership, investors may assign premium valuation multiples typically reserved for high-growth technology companies. This multiple expansion, combined with fundamental business growth, provides the mathematical foundation for the stock to double—requiring both sustained revenue increases and a revaluation of Amazon's long-term earnings potential in the AI economy.
Potential Risks to Growth
While Amazon's pathway looks promising, several factors could hinder the stock from doubling. Intensifying competition in cloud computing from Microsoft Azure and Google Cloud, for example, could put pressure on AWS's margins and growth rates.
Furthermore, regulatory scrutiny over Amazon's market dominance, especially in e-commerce and advertising, might lead to antitrust actions. These could limit expansion or even force business restructuring. Google and Meta are already facing the heat. The company's massive AI capital expenditures also carry execution risk; if these investments don't deliver expected returns or take too long to materialize, investor sentiment could turn negative.
Additionally, economic downturns could reduce enterprise cloud spending and consumer e-commerce activity. Elevated interest rates could also make high-growth stocks like Amazon less appealing compared to fixed-income alternatives. Overall, investors willing to bet on Amazon should take into account these risks as well.
Now, we apply risk assessment framework while constructing the Trefis High Quality (HQ) Portfolio which, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
26 minutes ago
- Yahoo
Goldman Sachs lifts TSMC target as AI and advanced-packaging demand broadens
-- Goldman Sachs raised its price target for Taiwan Semiconductor Manufacturing Co to NT$1,210 from NT$1,145, saying concerns about large AI-chip order cuts have eased while demand for the company's advanced CoWoS packaging is spreading beyond artificial-intelligence workloads. The brokerage increased its earnings forecasts for the world's biggest contract chipmaker by 2%-6% for 2025-27 after boosting projected wafer revenue from 3-nanometre and 5-nanometre production. It now expects TSMC's dollar revenue to grow roughly 29% next year and 17% in 2026. Goldman sees limited risk of further reductions in orders for AI processors, citing improved supply-chain coordination between TSMC and server builders. At the same time, it said more smartphone, server and networking customers are adopting CoWoS – a chip-on-wafer packaging technique that allows multiple chips to be combined inside a single module, helping diversify demand. The brokerage lifted its CoWoS shipment estimates to 664,000 wafers in 2025 and 1.56 million in 2027, and raised its capital-expenditure forecasts to US$42 billion for 2026 and US$50 billion for 2027 to reflect faster capacity expansion. Goldman also expects TSMC to impose another round of price increases on its most advanced manufacturing nodes and packaging services in 2026, supported by tight supply and limited competition. TSMC's Taipei-listed shares were last at NT$1,070, about 13% below the new target, while its New York-listed ADRs traded around $222.18 in afternoon trading on Wednesday. Related articles Goldman Sachs lifts TSMC target as AI and advanced-packaging demand broadens BMO cuts Triple Flag rating after 60% rally but lifts target Powell: Fed's interest rate control toolkit depends on bank reserves
USA Today
30 minutes ago
- USA Today
How the massive cost of Bezos-Sánchez wedding compares to average US nuptials
As the world waits for the upcoming extravagant wedding in Venice of Amazon founder and billionaire Jeff Bezos and his fiancee, Lauren Sánchez, brides and grooms in the U.S. are figuring out ways to stretch their more modest wedding budgets amid tariff increases. The Bezos-Sánchez wedding has been estimated to cost between $23 million to $34 million, as previously reported by USA TODAY and according to Venice regional governor Luca Zaia. That's a far cry from the average U.S. wedding in 2024, which cost $33,000, down slightly from $35,000 for 2023, according to The Knot's Real Weddings 2025 Study. Sánchez also shared with Vogue that her pink engagement ring was worth $2.5 million. On average, an engagement ring in the U.S. cost $5,200 in 2024, according to The Knot's study. That's down from $5,500 in 2023, $5,800 in 2022 and $6,000 in 2021. Tariffs are an unwelcomed wedding guest As a florist, Allison Krivachek is doing her best to navigate tariff increases to imported flowers to keep costs for her brides and grooms down. As a bride-to-be, Krivachek is also trying to make choices to keep her July wedding budget from increasing. Brides, grooms and wedding vendors are in similar boats as prices for imported goods and tariffs add costs to an already expensive life event. Many aspects of the wedding day will be affected by tariffs, including alcohol, flowers, the wedding dress and goods such as centerpiece decorations if they are imported, according to The Knot, a wedding website. As much as 80% of cut flowers are imported from other countries and 90% of wedding gowns sold in the U.S. are imported, according to The Knot, which could hike wedding costs. Financial costs weigh heavy on minds of brides and grooms In a survey of 741 engaged brides and grooms users of The Knot, shared exclusively with USA TODAY, 73% of couples said keeping costs within their budget were the top concern, and 46% said economic factors such as inflation were a major concern. Thirty-four percent were concerned about the rising costs of goods that could affect weddings though price changes specifically because of tariffs were less of a concern with 15% of couples mentioning it. More than half of engaged couples (58%) said they hadn't seen tariffs affect their weddings yet, but 36% said they were making changes to their plans because of economic stress. Of those couples, 22% were adjusting their budgets while 68% said they were increasing their budgets. Rather than cutting back, many couples responded to the concerns of looming tariffs by taking the proactive steps like booking early and consulting pros. Vendors are good about helping couples figure out ways to make changes to suit their budget or plan for increases, said Lauren Kay, executive editor of The Knot. "They want to help you have the best wedding ever and they want to help you pull that off, whether that's avoiding a tariff or making a trade off so your budget isn't terribly impacted," Kay told USA TODAY. Couples do not seem to be panicking, Kay said, as they deal with another moment in wedding planning. "It's not so much of a concern about the tariffs, itself, but just thinking about how we are going to plan our weddings and stay within budget with all of the economic factors that we're facing today," she said. The average U.S. wedding in 2024 costs $33,000, down slightly from $35,000 for 2023, according to The Knot's Real Weddings 2025 Study. Tariff increases have started showing up Some vendors, like Krivachek, are already starting to see those increases. "When they first came out, it was like, oh my gosh, this is going to be really devastating. We were seeing anywhere from 10% to 25%, and when you're talking about a wedding in flowers, when it's $5,000 plus, that 10% to 25% ... really adds up quickly," said Krivachek, referring to the average floral budget for weddings. Some suppliers have also used the tariff news to unfairly raise prices as much as double, Krivachek said. A lot of florists and couples have been panicking on how to offset tariff increases and checking contract language, which may allow vendors to raise prices because of market fluctuations, she said. Krivachek said she and other wedding vendors learned during the COVID-19 pandemic that they had to include a clause in their contracts to allow for unexpected market pricing fluctuations. She added she has communicated with consumers about other options, rather than pass tariff-related prices to prospective brides and grooms. "They can either up their budget to keep everything the same or we can sub with local varieties, which I've been loving, and it's really been a positive thing for local growers," Krivachek said. She has told some brides, especially those with winter weddings, that if their heart is set on a particular type of flower that cannot be grown domestically in the winter, they will have to increase their budget. Florist makes adjustments to her wedding budget Krivachek also is getting married in July. Her floral budget is the largest portion of her budget at a hefty $36,000, partially because she feels she needs to make a statement as a florist. She has made some adjustments to keep her budget the same, including using a lot of landscaping plants and bushes. "I'm excited about that because I want to make that a trend where you use these flowers and bushes that you get to take home and plant and remember your wedding and have it be sustainable," she said. She has also reduced the number of imported cut flowers she is getting to stay within her budget. She has not seen any tariff-related increases on other parts of her wedding budget, she said. Uncomfortable Conversations: Being a bridesmaid is expensive. Can or should you say no? Bridal gowns also seeing tariff price increases A lot of the components to design and make a gown come from various countries, so between the materials and the execution of the product being made and transported, tariffs affect the price, said Nayri Kalayjian, owner of Lovella Bridal in Los Angeles. "Price increases are everywhere, so the wedding industry is no different, no matter where the gown is being manufactured," she said. Some designers are doing a straight price increase while others have added a percentage for the tariffs, she said. Kalayjian said she has seen some tariff surcharges anywhere from 10% to 35%. But typically bridal boutiques see price increases multiple times a year, regardless of tariffs, Kalayjian said. Kalayjian said she often tells brides if they see a dress they absolutely love, don't wait too long or it could be discontinued or increase in price. Bridal gowns are also taking longer to make because they are all custom-ordered, she said. The turnaround time is typically six to eight months. Kalayjian added, however, there are dresses at every price point for every budget, even with price increases. Brides can often get sample dresses at steep discounts, she said.
Yahoo
30 minutes ago
- Yahoo
How the massive cost of Bezos-Sánchez wedding compares to average US nuptials
As the world waits for the upcoming extravagant wedding in Venice of Amazon founder and billionaire Jeff Bezos and his fiancee, Lauren Sánchez, brides and grooms in the U.S. are figuring out ways to stretch their more modest wedding budgets amid tariff increases. The Bezos-Sánchez wedding has been estimated to cost between $23 million to $34 million, as previously reported by USA TODAY and according to Venice regional governor Luca Zaia. That's a far cry from the average U.S. wedding in 2024, which cost $33,000, down slightly from $35,000 for 2023, according to The Knot's Real Weddings 2025 Study. Sánchez also shared with Vogue that her pink engagement ring was worth $2.5 million. On average, an engagement ring in the U.S. cost $5,200 in 2024, according to The Knot's study. That's down from $5,500 in 2023, $5,800 in 2022 and $6,000 in 2021. As a florist, Allison Krivachek is doing her best to navigate tariff increases to imported flowers to keep costs for her brides and grooms down. As a bride-to-be, Krivachek is also trying to make choices to keep her July wedding budget from increasing. Brides, grooms and wedding vendors are in similar boats as prices for imported goods and tariffs add costs to an already expensive life event. Many aspects of the wedding day will be affected by tariffs, including alcohol, flowers, the wedding dress and goods such as centerpiece decorations if they are imported, according to The Knot, a wedding website. As much as 80% of cut flowers are imported from other countries and 90% of wedding gowns sold in the U.S. are imported, according to The Knot, which could hike wedding costs. In a survey of 741 engaged brides and grooms users of The Knot, shared exclusively with USA TODAY, 73% of couples said keeping costs within their budget were the top concern, and 46% said economic factors such as inflation were a major concern. Thirty-four percent were concerned about the rising costs of goods that could affect weddings though price changes specifically because of tariffs were less of a concern with 15% of couples mentioning it. More than half of engaged couples (58%) said they hadn't seen tariffs affect their weddings yet, but 36% said they were making changes to their plans because of economic stress. Of those couples, 22% were adjusting their budgets while 68% said they were increasing their budgets. Rather than cutting back, many couples responded to the concerns of looming tariffs by taking the proactive steps like booking early and consulting pros. About 1 in 3 couples are purchasing items earlier to lock in pricing. Many are opting for U.S.-made or local products to offset import costs. 28% of couples are slightly reducing guest count by an average 25 people, or 12 couples, not wanting to sacrifice the guest experience (average 112 guests). Vendors are good about helping couples figure out ways to make changes to suit their budget or plan for increases, said Lauren Kay, executive editor of The Knot. "They want to help you have the best wedding ever and they want to help you pull that off, whether that's avoiding a tariff or making a trade off so your budget isn't terribly impacted," Kay told USA TODAY. Couples do not seem to be panicking, Kay said, as they deal with another moment in wedding planning. "It's not so much of a concern about the tariffs, itself, but just thinking about how we are going to plan our weddings and stay within budget with all of the economic factors that we're facing today," she said. The average U.S. wedding in 2024 costs $33,000, down slightly from $35,000 for 2023, according to The Knot's Real Weddings 2025 Study. Some vendors, like Krivachek, are already starting to see those increases. "When they first came out, it was like, oh my gosh, this is going to be really devastating. We were seeing anywhere from 10% to 25%, and when you're talking about a wedding in flowers, when it's $5,000 plus, that 10% to 25% ... really adds up quickly," said Krivachek, referring to the average floral budget for weddings. Some suppliers have also used the tariff news to unfairly raise prices as much as double, Krivachek said. A lot of florists and couples have been panicking on how to offset tariff increases and checking contract language, which may allow vendors to raise prices because of market fluctuations, she said. Krivachek said she and other wedding vendors learned during the COVID-19 pandemic that they had to include a clause in their contracts to allow for unexpected market pricing fluctuations. She added she has communicated with consumers about other options, rather than pass tariff-related prices to prospective brides and grooms. "They can either up their budget to keep everything the same or we can sub with local varieties, which I've been loving, and it's really been a positive thing for local growers," Krivachek said. She has told some brides, especially those with winter weddings, that if their heart is set on a particular type of flower that cannot be grown domestically in the winter, they will have to increase their budget. Krivachek also is getting married in July. Her floral budget is the largest portion of her budget at a hefty $36,000, partially because she feels she needs to make a statement as a florist. She has made some adjustments to keep her budget the same, including using a lot of landscaping plants and bushes. "I'm excited about that because I want to make that a trend where you use these flowers and bushes that you get to take home and plant and remember your wedding and have it be sustainable," she said. She has also reduced the number of imported cut flowers she is getting to stay within her budget. She has not seen any tariff-related increases on other parts of her wedding budget, she said. Uncomfortable Conversations: Being a bridesmaid is expensive. Can or should you say no? A lot of the components to design and make a gown come from various countries, so between the materials and the execution of the product being made and transported, tariffs affect the price, said Nayri Kalayjian, owner of Lovella Bridal in Los Angeles. "Price increases are everywhere, so the wedding industry is no different, no matter where the gown is being manufactured," she said. Some designers are doing a straight price increase while others have added a percentage for the tariffs, she said. Kalayjian said she has seen some tariff surcharges anywhere from 10% to 35%. But typically bridal boutiques see price increases multiple times a year, regardless of tariffs, Kalayjian said. Kalayjian said she often tells brides if they see a dress they absolutely love, don't wait too long or it could be discontinued or increase in price. Bridal gowns are also taking longer to make because they are all custom-ordered, she said. The turnaround time is typically six to eight months. Kalayjian added, however, there are dresses at every price point for every budget, even with price increases. Brides can often get sample dresses at steep discounts, she said. (This story has been updated to correct an error.) Betty Lin-Fisher is a consumer reporter for USA TODAY. Reach her at blinfisher@ or follow her on X, Facebook or Instagram @blinfisher and @ on Bluesky. Sign up for our free The Daily Money newsletter, which will include consumer news on Fridays, here. This article originally appeared on USA TODAY: How cost of the Bezos-Sánchez wedding compares to the US average
