Amazon (AMZN) shares have fallen recently to make them look like a rare bargain, according to some investors. With the stock now trading at a much lower price-to-earnings ratio—about 28 times estimated future earnings—it is well below its 10-year average and cheaper than rivals like Walmart (WMT), Costco (COST), and even Apple (AAPL). Some on Wall Street, like Clayton Allison of Prime Capital Financial, believe that this creates a strong buying opportunity due to Amazon’s strong long-term growth potential in the e-commerce and tech industries.
Despite an almost 8% decline this year and seven consecutive weekly drops, Amazon has still outperformed the broader Magnificent 7 Index. In addition, five-star Monness analyst Brian White sees upside potential in Amazon due to its growth in areas like AWS, advertising, AI, robotics, and Alexa. Indeed, revenue is expected to climb by nearly 10% this year and even faster in 2026, which will help increase profits over time.
However, the near-term challenges remain, such as uncertainty around tariffs and the economy, which could weigh on consumer spending and AI adoption. While AWS revenue grew by 19%, it didn’t accelerate as much as investors had hoped. Still, Amazon plans to invest $100 billion, mostly in AI infrastructure like data centers. But as LPL Financial’s Kristian Kerr points out, even solid fundamentals may not be enough to move tech stocks higher without more clarity around the broader economic picture.
Is Amazon Stock Expected to Rise?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AMZN stock based on 45 Buys and one Hold assigned in the past three months, as indicated by the graphic below. Furthermore, the average AMZN price target of $269.85 per share implies 33.2% upside potential.
