Amazon (AMZN) is again proving to be forward-thinking in its operations. Based on internal reports, the retailer unveiled a strategic undertaking called “Project Greenland” to acquire key GPU infrastructure in the face of growing demand from artificial intelligence (AI) applications. With the likes of Microsoft (MSFT) and Meta Platforms (META) grappling with shortages of chips, Amazon’s planning back in 2023 seems to have yielded results.

The effort was intended to balance GPU allocation by return on investment (ROI), internal usage needs, and long-term increases in cash flow. With tightened protocols and prioritized Amazon Web Services (AWS) infrastructure, Amazon made it possible for its retail business and in-house generative AI teams not to be left behind. With more than $5.7 billion budgeted for AWS infrastructure in 2025 and in-house chips such as Trainium ramping up production, Amazon will be in a great position to stay a top AI player while supporting its traditional cloud and retail dominance.

Plus, AMZN stock has bounced back decisively as of late, climbing more than 9% in the last week. The move comes ahead of its report on May 1, when the market will be listening for remarks about AI-driven margin growth and cloud expansion.

About Amazon Stock

Amazon (AMZN), with its headquarters in Seattle, engages in e-commerce, cloud computing (AWS), digital advertising, and AI hardware. It dominates the world’s online retail and business cloud services. It has a market capitalization of approximately $1.98 trillion, ranking it among the world’s largest companies in terms of valuation.

Though the stock continues to be below its high of $242.52 from the 52-week period, it has risen close to 24% from its 52-week low of $151.61. When compared to the Nasdaq Composite Index ($NASX) which is down just shy of 10.3% for the year, AMZN has underperformed, dropping by 13.9%.

Valuation multiples indicate that the company trades at a justified premium. Its price-earnings ratio in the forward period is 28.8x. Both of its 3x price-sales and 1.29x PEG multiples indicate fair value in light of accelerating earnings.

Amazon Beats on Earnings

Amazon keeps delivering on the bottom line. For Q4 2024, the company posted diluted EPS of $1.86, surpassing the Street’s estimate of $1.52 by a wide 22.37% margin. This joins a string of beats in the previous quarters – +36.14% in Q1, +17.14% in Q2, and +25.44% in Q3 – emphasizing the consistent outperformance of Amazon despite challenging macroeconomic and competitive environments.

Earning momentum is supported by robust operational leverage in the AWS, advertising, and retail segments. This trend of higher-than-consensus profitability has been sustained by management’s efforts to trim costs, coupled with the growing contribution from high-margin verticals such as Amazon Web Services and advertising.

Moving forward, the anticipated average EPS for the Q1 2025 is $1.37, a 21.24% improvement from last year’s figure of $1.13. For the entire year 2025, analysts guide for the company to post $6.26 per share, compared to the $5.53 posted in 2024. Projections for 2026 envision additional growth to $7.19, a 14.86%.

What Analysts Expect for Amazon Stock

Analyst sentiment for Amazon continues to be very bullish with a “Strong Buy” consensus rating. Of the 52 analysts who follow the stock, 46 give it a “Strong Buy,” five rate it a “Moderate Buy,” and only one calls it “Hold.” This indicates high confidence in Amazon’s long-term growth story, which is fueled by AI, AWS, and advertising. 

Its mean target of $247.51 represents potential upside of 32%.