I’ve been tracking Amazon (AMZN) for a long time, and I’m highly impressed with how the company changes its narrative. Amazon is no longer just a big company that grows fast and has low margins; it’s starting a new chapter fueled by advanced AI. Its Q1 FY2025 numbers were a testament to ongoing progress and future growth prospects. The online retail juggernaut made $156 billion in revenue and a whopping $18.4 billion in operating income. What’s even more exciting is what the future holds.
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I’m extremely bullish on the stock, with a personal $280 target and strong belief in Amazon’s long-term value. Meanwhile, almost every single analyst on Wall Street sees AMZN as a screaming buy, setting various price targets around the $240 mark.
Finding the Rhythm in Operating Leverage
Not long ago, people perceived Amazon as a company that made sturdy revenues yet slim profits. No more. The Q1 report showed operating income rose 20% from a year ago to $18.4 billion, beating expectations by $400 million. Operating profit in the last fiscal year almost doubled to $68.6 billion, lifting margins from 6.4% to 10.8%.
How did Amazon shift its strategy? Through utilizing robust, old-fashioned strategies. Amazon reduced wasteful areas, streamlined logistics, and found new methods to operate more efficiently under Andy Jassy’s management. A more localized fulfillment model has enabled faster, lower-cost deliveries that are now active deeper into rural America due to continued investment in infrastructure.

The business is also experiencing benefits from a positive shift in its revenue mix. Advertising generated $13.9 billion in Q1, increasing nearly 19% year-over-year. This segment requires hardly any additional cost and continues to perform well. Third-party sellers now comprise 61% of total units sold, generating fees that add to profits without inventory risk. Add all that together, and Amazon is a company that has figured out how to scale size without bleeding profit.
AMZN’s Durable Flywheel Compounds Returns
When I think about Amazon’s long-term advantage, it’s primarily related to its unique ecosystem. Prime is the clear centerpiece. With hundreds of millions of global users, it isn’t so much a subscription—it’s a habit. In 2024, Amazon set a new record for delivery speeds while providing some of the lowest online prices. This one-two punch of fast service and low prices is hard to match at scale.
And while e-commerce is what the world sees, AWS is the behind-the-scenes machinery. It generated $29.3 billion in revenue and $11.5 billion in operating income in Q1, with a best-in-class 39% margin. Big names like Adobe (ADBE) and Nasdaq (NDAQ) continue to choose AWS for its reliability and tools. And now, AWS’s foray into AI only contributes to its moat. The AI segment of AWS is currently at a multi-billion-dollar run-rate with triple-digit growth.

Amazon’s AWS performance obligations represent the remaining revenue Amazon has contractually committed to deliver through AWS services. In other words, the amount of revenue Amazon is in line to register further down the track.
Reducing barriers to AI access translates to more projects on AWS, and additional usage translates to more revenue. These fundamental tools are already assisting companies in training and utilizing models at a much lower cost than many other options. As a result, I view AWS not just as Amazon’s most lucrative segment, but also as its most critical.
Why a $280 Price Target Makes Sense
I’m not concerned about Amazon’s conservative Q2 guidance. The company has a tradition of setting expectations low and then surpassing them—”lowballing,” as they call it on Wall Street. As margins are expanding and growth levers abound—from AI to global logistics—Amazon can easily surprise investors yet again.
I’ve been following this story closely, and I don’t think Wall Street completely understands the strength of Amazon’s earnings power today. I still think Amazon is modestly undervalued at this stock price, especially because of the potential for continued double-digit earnings growth and steady value appreciation as confidence builds around AI.

I continue to hold a bullish 12-month price target of $280 for Amazon. That target isn’t based on a moonshot. It’s grounded in fundamentals, operating leverage, and the belief that this company’s next decade will be even more transformative than the last.
Is Amazon Stock Expected to Rise?
On Wall Street, Amazon has a consensus Strong Buy rating based on 48 Buys, one Hold, and zero Sells. The average AMZN stock price target is $241.59, indicating ~30% upside potential over the next 12 months. Therefore, my independent estimate is somewhat on the high end, but certainly justified given the institutional ratings.

AMZN’s Leaner, Meaner, and Smarter Future
Amazon’s quarterly results revealed strong figures and gave us a glimpse of the future. The company is leaner, more profitable, and better positioned than ever to capitalize on the next wave of technology expansion. Whether AI, logistics, or cloud computing, Amazon plans to extend its online shopping dominance to other walks of life, including cloud computing and AI.
Many analysts and market watchers still overlook the magnitude of the AI-related upside, and that’s why I’m adhering to my $280 target. Amazon is no longer about being large; it’s about profiting from that size with thoughtful planning and solid execution. For long-term investors, the upside is just getting started.
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