Amazon (AMZN) is one of the most closely watched companies in the stock market due to its dominance in e-commerce, leadership in cloud computing, and growing presence in advertising and logistics. Over time, it has transformed from an online retailer into a tech giant with several strong business segments. This gives Amazon multiple ways to grow, but it also means the company faces a wide range of risks. Looking ahead, there are clear catalysts that could push the stock higher, as well as challenges that could slow down its momentum.
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Catalysts that May Push the Stock Higher
Starting off with the catalysts, a major growth engine for Amazon is Amazon Web Services (AWS), which is its cloud computing division. In Q2 2025, AWS revenue grew by 17.5% year-over-year to $30.9 billion, slightly beating expectations. Furthermore, AWS’ deal backlog grew by $6 billion compared to the previous quarter to reach $195 billion, which is a sign that customer demand is growing. This momentum is supported by AWS’ rollout of new generative AI tools, which are designed to attract more enterprise clients and improve existing relationships.
While AWS’ growth rate is still behind Microsoft (MSFT) Azure’s 39% and Google (GOOGL) Cloud’s 32%, it remains the market leader with about 30% of the global market share, giving it a strong competitive position. Separately, Amazon’s advertising business is another bright spot.
Indeed, it grew by 22% in Q2, making it one of the company’s fastest-growing and most profitable segments. Thanks to Amazon’s huge e-commerce platform, it can offer advertisers highly targeted placements that deliver strong returns. The company’s logistics investments, especially its ability to provide same-day and next-day delivery for many items, also increase Prime’s value, thereby making it harder for customers to switch to competitors. This combination of advertising growth and logistics advantages could help Amazon capture and maintain a larger market share in online shopping.
Risks to Watch Out For
Despite these strengths, Amazon still has weaknesses. In fact, its growth still depends on the health of the broader economy. If inflation, higher interest rates, or other factors slow consumer spending, its retail business could see weaker demand, especially for non-essential products. This slowdown would also affect advertising revenue, since marketing budgets often shrink when sales expectations drop.
Competition in cloud computing is also intense. Even though AWS continues to grow, Microsoft and Google are investing heavily in AI features, pricing strategies, and attracting new customers. If AWS loses market share or fails to keep up with rivals, Amazon could feel pressure on one of its most profitable divisions.
In addition, rising costs are another challenge, with labor, transportation, and infrastructure expenses staying high. As a result, maintaining quick delivery times, along with powerful data centers for its AWS segment at a massive scale, is expensive, and if costs keep climbing, profit margins could be squeezed, especially in retail.
What Is the Price Target for AMZN Stock?
Turning to Wall Street, analysts have a Strong Buy consensus rating on Amazon stock based on 43 Buys and one Hold assigned in the past three months. Furthermore, the average AMZN stock price target of $264.57 per share implies 19.6% upside potential from current levels.
Final Thoughts
Amazon’s mix of businesses gives it multiple paths for growth. The continued growth of its AWS revenue and backlog is an encouraging sign that demand remains healthy. At the same time, strong advertising growth and a delivery network that’s hard to match put Amazon in a good position to benefit from long-term trends in e-commerce, cloud services, and AI adoption.
Still, the company faces meaningful challenges, as economic conditions, competition, and cost pressures will all influence how the stock performs in the coming quarters. For investors, the key will be watching whether Amazon can keep AWS’s growth going, expand its high-margin segments, and control costs while continuing to innovate. If it succeeds, the stock could keep climbing.