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Amazon Stock Lagging AI Boom: Why?
21 Nov
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.
