Key Takeaways:
- Amazon’s stock is now cheaper, making some investors excited about buying it.
- The company is investing big in AI, but it’s struggling to meet demand for cloud services.
- Experts think Amazon will grow, but market uncertainty could slow its comeback.
Amazon Inc, a company known for its expensive stock, is now trading at lower prices, making some investors see it as a great time to buy.
The drop in share value mixed with hopes for strong future growth has made Amazon look more attractive compared to its competitors like Apple Inc., Walmart Inc.
Amazon’s Stock Price Hits a Low Point
Right now, Amazon stock is priced about 27 times the expected earnings going forward which is much lower than its 10 year average and cheaper than retail giants like Walmart and Costco Wholesale Corp.
A couple years ago, Apple stock was cheaper than Amazon, but today, Apple stock turns out to be worth more
Experts say this could be a great time to invest. According to Clayton Allison, Portfolio Manager at Prime Capital Financial, Amazon’s price right now feels like an “incredible opportunity” because of its strong long-term potential.
Amazon’s Stock Struggles in a Tough Market
So far this year, Amazon stock has dropped by 6.78% and has been falling for seven weeks straight, which marks one of its longest losing streak since May 2022.
The company has been slashing costs and enhancing efficiency to make more profits. But they still feel the chill because of general market instability.
Even with this dip, analysts remain very positive about Amazon’s business. Data shows that more than 95% of analysts recommend buying the stock while also predicting it could go up by more than 30% from the current price.
Brian White, an analyst at Monness Crespi Hardt & Co., profits still have plenty of room to grow and has set a price target of $265 per share.
Amazon Bets Big on Artificial Intelligence
Amazon isn’t just about online shopping, they also earn a lot from Amazon Web Services (AWS), digital ads, and artificial intelligence (AI). The company recently launched an AI-powered version of its Alexa assistant, which seems to be a good bet for their growth.
Experts predict that Amazon’s revenue will grow by 9.6% this year and pass 10% in 2026. Net earnings are expected to rise from 15% in 2025 to 20% the following year.However, Amazon has been struggling to expand its ability to offer high quality AI services at the right pace. In its latest earnings report, AWS revenue grew by 19%, but not as much as hoped for.
Amazon, like Microsoft Corp., has reported issues meeting the increasing demand for AI-powered cloud services. To fix this, Amazon is investing about $100 billion this year, mainly to build AI infrastructure.
Will Amazon’s Stock Bounce Back?
Even though Amazon is expected to grow in the long run, investors are wondering when its big spending on AI will start paying off.
Market strategist Kristian Kerr warns that even though Amazon’s stock looks like a good deal, the uncertainty in the economy could slow down a strong recovery.
“There was over-enthusiasm surrounding big tech earlier this year, and while we are getting to levels where they look attractive again, good fundamentals or multiples don’t really matter when there’s so much uncertainty,” Kerr said.
Amazon’s stock price is at a rare low, but the big question is whether now is the right time to buy or if market struggles will continue to hold it back.
