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Amazon (AMZN)
NASDAQ:AMZN
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Amazon (AMZN) AI Stock Analysis

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AM

Amazon

(NASDAQ:AMZN)

Rating:73Outperform
Price Target:
$233.00
▲(2.43%Upside)
Amazon's overall stock score reflects a strong financial performance and positive earnings call outcomes, with growth in key areas such as AWS and advertising. However, technical analysis indicates potential overbought conditions, and a high P/E ratio raises valuation concerns. Despite these challenges, Amazon's strategic initiatives and robust financials provide confidence in its long-term potential.
Positive Factors
Cost Efficiency
GenAI is reducing costs in AMZN's logistics, enhancing efficiency.
Revenue Growth
Strong AWS revenue growth and margin expansion should benefit AMZN.
Sales Performance
Record-breaking prime days are expected to boost AMZN’s outlook.
Negative Factors
Cost Management Focus
Project Kuiper has remained a top management growth initiative despite Amazon’s cost focused agenda, and satellite launches began.
Disclosure Practices
Amazon provided even less quantifiable disclosures vs prior years, making it difficult to gauge sales from the event.
Regulatory Challenges
Regulatory headwinds persist and the macro is treacherous.

Amazon (AMZN) vs. SPDR S&P 500 ETF (SPY)

Amazon Business Overview & Revenue Model

Company DescriptionAmazon.com, Inc. is a multinational technology company based in Seattle, Washington, primarily known for its e-commerce platform. It operates through several segments, including North America, International, and Amazon Web Services (AWS). Amazon offers a wide array of products and services, from consumer electronics, digital media, and cloud computing services to groceries and apparel. The company also provides artificial intelligence solutions, streaming services via Amazon Prime Video, and owns several subsidiaries such as Whole Foods Market and Zappos.
How the Company Makes MoneyAmazon generates revenue through multiple streams, primarily focusing on its e-commerce platform and cloud computing services. The e-commerce segment includes product sales and commissions from third-party sellers using Amazon's marketplace. Amazon charges these sellers fees for listing and selling their products on its platform. Additionally, Amazon earns money from subscription services, such as Amazon Prime, which offers members benefits like free shipping, streaming access, and exclusive deals. Amazon Web Services (AWS) is a major revenue driver, providing scalable cloud computing solutions to businesses and governments, and is known for its high profitability. Advertising services are another significant source of income, as businesses pay Amazon to promote their products on its platform. Furthermore, Amazon has strategic partnerships and acquisitions that enhance its market position and expand its product offerings, contributing to its overall earnings.

Amazon Key Performance Indicators (KPIs)

Any
Any
AWS Performance Obligations
AWS Performance Obligations
Reflects future revenue commitments for AWS services, indicating the strength of customer demand and the potential for sustained growth in Amazon's cloud business.
Chart InsightsAWS performance obligations have shown consistent growth, reaching $189 billion by Q1 2025, reflecting strong demand and long-term commitments. The earnings call highlighted AWS's 17% year-over-year revenue growth, driven by expanding AI capabilities and a $117 billion annualized revenue run rate. This growth underscores AWS's strategic importance to Amazon's overall business, despite broader economic uncertainties and tariff impacts. The focus on AI and cloud services positions AWS as a key driver of Amazon's future revenue streams, enhancing its competitive edge in the tech sector.
Data provided by:Main Street Data

Amazon Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q1-2025)
|
% Change Since: 19.60%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth and operational performance, particularly in Amazon Ads and AWS. There were concerns about potential impacts from tariffs and some one-time charges affecting operating margins, but these did not overshadow the positive financial results and innovations in AI and delivery speed improvements.
Q1-2025 Updates
Positive Updates
Revenue Growth and Operating Income Increase
Amazon reported $165.7 billion in revenue for Q1 2025, up 10% year-over-year, excluding the impact from foreign exchange rates. Operating income increased by 20% year-over-year to $18.4 billion.
Amazon Ads Success
Amazon Ads generated $13.9 billion in revenue, growing 19% year-over-year, demonstrating strong growth across its advertising offerings.
AWS Performance and AI Expansion
AWS grew 17% year-over-year to a $117 billion annualized revenue run rate. The AI business showed a multi-billion dollar annual revenue run rate, growing in triple-digit percentages year-over-year.
Record Delivery Speeds
Amazon set new delivery speed records, delivering more items in the same day or next day in Q1 than any other quarter in its history.
Negative Updates
Impact of Tariffs and Inventory Challenges
Amazon faced potential challenges from heightened tariffs, leading to some forward buying and increased inventory costs.
One-Time Charges Affecting Operating Margins
One-time charges related to historical customer returns and costs to receive inventory impacted operating margins in North America and international segments.
Company Guidance
In the Amazon Q1 2025 financial results call, the company provided guidance incorporating several metrics. Amazon reported $165.7 billion in revenue, marking a 10% year-over-year increase, excluding foreign exchange impacts. Operating income reached $18.4 billion, up 20% from the previous year. The trailing 12-month free cash flow stood at $25.9 billion. The company highlighted its achievements in delivery speed, setting new records for same-day and next-day deliveries, and emphasized the efficiency of its regionalized fulfillment network. Amazon Ads generated $13.9 billion in revenue, growing 19% year-over-year. AWS, Amazon's cloud segment, achieved a 17% year-over-year growth, resulting in a $117 billion annualized revenue run rate. The call also addressed potential impacts from tariffs and outlined Amazon's strategic focus on maintaining low prices and broad selection amidst uncertain economic conditions.

Amazon Financial Statement Overview

Summary
Amazon demonstrates solid financial performance with strong profitability, efficient operations, and a stable balance sheet. Revenue growth and profitability metrics are robust, supporting an optimistic outlook. The balance sheet is well-managed, though reducing debt could enhance financial flexibility. Cash flow remains strong, though the decline in free cash flow should be monitored. Overall, Amazon's financial health is commendable, reflecting its position as a leading player in the specialty retail sector.
Income Statement
85
Very Positive
Amazon's income statement reveals strong profitability and growth. The TTM (Trailing-Twelve-Months) gross profit margin stands at 45.37%, indicating solid cost management. The net profit margin is a robust 10.14%, showcasing effective conversion of revenues into profit. Revenue growth is consistent, with a 2% increase from the previous year, reflecting steady expansion. EBIT and EBITDA margins are healthy at 11.02% and 17.98% respectively, underscoring operational efficiency.
Balance Sheet
80
Positive
Amazon's balance sheet is strong, with a debt-to-equity ratio of 0.44, indicating prudent leverage. The return on equity (ROE) is a solid 21.56%, highlighting effective use of shareholder funds. The equity ratio is 47.54%, reflecting a stable capital structure with significant equity financing. Overall, the company maintains a healthy balance between debt and equity, although there is room for improvement in reducing total debt.
Cash Flow
75
Positive
The cash flow statement shows robust operating cash flow to net income ratio of 1.73, indicating strong cash generation capabilities. However, the free cash flow has decreased by 36.67% compared to the previous year, which could be a concern. The free cash flow to net income ratio is 0.32, suggesting moderate cash conversion efficiency. Overall, while operating cash flow remains strong, the decline in free cash flow warrants attention.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue637.96B574.78B513.98B469.82B386.06B
Gross Profit311.67B270.05B225.15B197.48B152.76B
EBITDA123.81B89.40B38.35B74.39B51.01B
Net Income59.25B30.43B-2.72B33.36B21.33B
Balance Sheet
Total Assets624.89B527.85B462.68B420.55B321.19B
Cash, Cash Equivalents and Short-Term Investments101.20B86.78B70.03B96.05B84.40B
Total Debt130.90B135.61B140.12B116.39B84.39B
Total Liabilities338.92B325.98B316.63B282.30B227.79B
Stockholders Equity285.97B201.88B146.04B138.25B93.40B
Cash Flow
Free Cash Flow32.88B32.22B-16.89B-14.73B25.92B
Operating Cash Flow115.88B84.95B46.75B46.33B66.06B
Investing Cash Flow-94.34B-49.83B-37.60B-58.15B-59.61B
Financing Cash Flow-11.81B-15.88B9.72B6.29B-1.10B

Amazon Technical Analysis

Technical Analysis Sentiment
Positive
Last Price227.47
Price Trends
50DMA
213.80
Positive
100DMA
202.17
Positive
200DMA
207.78
Positive
Market Momentum
MACD
4.23
Positive
RSI
62.76
Neutral
STOCH
86.21
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AMZN, the sentiment is Positive. The current price of 227.47 is above the 20-day moving average (MA) of 222.15, above the 50-day MA of 213.80, and above the 200-day MA of 207.78, indicating a bullish trend. The MACD of 4.23 indicates Positive momentum. The RSI at 62.76 is Neutral, neither overbought nor oversold. The STOCH value of 86.21 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AMZN.

Amazon Risk Analysis

Amazon disclosed 24 risk factors in its most recent earnings report. Amazon reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Amazon Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$281.51B15.7413.04%0.01%5.17%74.55%
PDPDD
78
Outperform
$151.38B12.0236.31%35.04%22.04%
SESE
78
Outperform
$99.78B109.2111.13%30.18%1995.22%
JDJD
77
Outperform
$52.25B8.2819.81%0.09%8.13%91.39%
75
Outperform
$122.36B58.5249.11%41.92%81.11%
73
Outperform
$2.40T37.4025.24%10.08%71.88%
61
Neutral
€5.84B12.16-11.12%4.41%3.79%-34.20%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AMZN
Amazon
227.47
41.06
22.03%
MELI
Mercadolibre
2,384.72
692.49
40.92%
JD
JD
33.88
7.69
29.36%
BABA
Alibaba
120.71
45.86
61.27%
SE
Sea
154.82
87.84
131.14%
PDD
PDD Holdings
115.04
-18.04
-13.56%

Amazon Corporate Events

Executive/Board ChangesShareholder Meetings
Amazon Shareholders Meeting Highlights Key Decisions
Neutral
May 22, 2025

On May 21, 2025, Amazon held its Annual Meeting of Shareholders where several directors were elected, and Ernst & Young LLP was ratified as the independent auditor for 2025. Despite the approval of executive compensation, multiple shareholder proposals, including those on CEO-Chair separation, advertising risks, emissions reporting, and AI oversight, were not approved, indicating a potential disconnect between shareholder interests and company decisions.

The most recent analyst rating on (AMZN) stock is a Buy with a $220.00 price target. To see the full list of analyst forecasts on Amazon stock, see the AMZN Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: May 13, 2025