Why is Amazon stock underperforming the AI tech boom in 2025?

Amazon's stock has seen minimal gains compared to other tech companies due to various market factors, despite its strong operational performance.

What are Amazon's main growth drivers for the next 12 months?

Key drivers include accelerating growth in Amazon Web Services (AWS), improving profitability in retail, and increasing demand for AI-driven services and advertising.

What is the outlook for Amazon Web Services (AWS)?

AWS shows strong momentum with a significant backlog and new deals, indicating a strengthening pipeline and continued growth potential.

Home / Business and Economy / Amazon Stock Lagging AI Boom: Why?

Amazon Stock Lagging AI Boom: Why?

21 Nov

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Summary

Amazon's stock has seen minimal gains despite the tech sector's AI-driven rally.
Analysts remain optimistic, projecting significant upside for Amazon stock.
AWS, cloud growth, and AI services are key catalysts for Amazon's future performance.

The market's fervor for artificial intelligence has significantly boosted technology stocks throughout 2025, with the Nasdaq-100 Technology Index surging approximately 18%. Amidst this surge, Amazon's stock has experienced a muted performance, increasing by only about 0.5% year-to-date, lagging behind many of its mega-cap tech peers.

Despite this lag, financial analysts on Wall Street express strong optimism regarding Amazon's future prospects. The company has a track record of exceeding earnings expectations, most recently beating consensus estimates by a notable 23.4%. Several growth catalysts are poised to drive its share price upward, including robust expansion in cloud computing and its advertising business.

The core of Amazon's growth narrative lies in its cloud division, Amazon Web Services (AWS). AWS concluded the third quarter with a substantial $200 billion backlog, further bolstered by undisclosed deals in October that reportedly surpassed the entire third quarter's deal value. This strong pipeline, combined with operational momentum and accelerating AI service demand, positions Amazon for continued revenue and earnings growth.