Amazon Stock Poised for 23% Jump, Fueled by AI

Amazon’s stock has had a subdued start to 2025, slipping 0.2% as part of a broader market selloff triggered by concerns over inflation and the Federal Reserve’s potential interest rate policy. However, HSBC analyst Christopher Johnen sees brighter days ahead for the e-commerce and cloud giant. Maintaining his Buy rating, Johnen raised his price target from $225 to $270, projecting a 23% upside from the stock’s last close. His optimism comes on the heels of Amazon’s impressive 44% stock surge in 2024.

Johnen’s bullish outlook hinges on robust earnings and the increasing role of AI in driving Amazon’s growth. As the company prepares to report its fourth-quarter results, analysts anticipate earnings of $1.48 per share on $187.3 billion in revenue, according to FactSet. Johnen expects Amazon to exceed these estimates and continue its growth trajectory in 2025, particularly through its Amazon Web Services (AWS) cloud-computing division.

AWS is pivotal to Amazon’s strategy, contributing to the company’s AI ambitions by providing the massive data processing capabilities required to train and run AI models. The cloud-computing giant held a commanding 31% share of the global market in Q3 2024, per Synergy Research Group. Johnen predicts AWS will add $20 billion in revenue this year, with generative AI playing an increasingly significant role in that growth.

Amazon’s advertising revenue and improving e-commerce margins are additional tailwinds that Johnen believes will fortify the company’s competitive advantage and profitability. His revised price target reflects greater confidence than the average Wall Street consensus of $247, which still represents a 13% potential upside.

Amazon’s strategic focus on leveraging its past investments and expanding its AI-driven initiatives positions it to remain a leader in the tech and e-commerce sectors. With strong institutional support—68 out of 72 analysts covering the stock rate it a Buy—Amazon appears well-poised to weather economic challenges and capitalize on emerging opportunities.

As Johnen aptly notes, “Amazon is set to harvest the fruits of past investment,” signaling another strong year for the company in the ever-evolving tech landscape.

References and Acknowledgments

• George Glover (2025). Amazon Stock Can Jump 23%, Analyst Says. Why It’s All About AI. Barons. Available online. Accessed 21 January 2025.