Amazingly, online retail giant Amazon (AMZN) is not actually making most of its money from online retail. Rather, that revenue source is Amazon Web Services (AWS), the cloud provider that serves as the underpinnings of a lot of business operations. But growth in AWS has been slowing for quite some time now, and that is leaving some concerned. Investors are cautiously optimistic, as evidenced by the fractional gain in shares seen in Tuesday morning’s trading.
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Amazon has been king of the cloud market for a long time, but there are plenty of other competitors out to land a slice of that market pie for themselves. And those competitors are serious, high-end competitors, too: Microsoft (MSFT) and its Azure, and Alphabet (GOOGL) and its Google Cloud are just two of them, and those two are big enough competitors for anyone. In fact, reports suggest, Azure is getting closer to the top slot every day.
Now, that is leaving some very concerned. AWS’ growth rate is in decline, and competitors are stepping up their game. But Amazon’s major cash flow, along with its phenomenal research and development (R&D) spend, helps ensure that Amazon will always have a place at the table. Yes, competitors may get ahead of it, but Amazon will likely never be truly out of the picture. That kind of assurance calms a lot of investor concern before it can even start.
Making Lightning Strike Twice
Amazon has had dizzying success with its release of the Fallout television series. And with good reason, too, it was an excellent show. But Amazon is trying to make lightning strike twice with an adaptation of the Mass Effect series.
It is not yet known if this will be a full trilogy, or if the events of Mass Effect: Andromeda will get involved. What is known, however, is that we will have a long time to wait. Filming for the series will not even start until “Q4 2026,” which is the fourth quarter of 2026. Early reports suggest this season will follow the events of the first game rather closely. While some believe that is just a placeholder, others think that this is a sign Amazon will go for the full trilogy at least. But there is one problem with that: the game series depended heavily on player choice. The series will have to make choices for the viewer by default.
Is Amazon a Good Long-Term Investment?
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. After a 31.67% rally in its share price over the past year, the average AMZN price target of $263.90 per share implies 15.75% upside potential.
