On February 6, Amazon.com, Inc. (NASDAQ: AMZN) announced strong Q4 2024 financial results. Despite this, the company’s stock price declined due to a weaker-than-expected outlook for Q1 2025.
This article provides a comprehensive analysis of Amazon.com, Inc., including a breakdown of its Q4 2024 earnings, a technical analysis of AMZN stock, and a forecast for 2025. We’ll also explore Amazon’s business model, investment risks, and expert predictions for its stock performance.
Amazon.com, Inc. is one of the world’s largest technology companies. It was established by Jeffrey Bezos in 1994 in Seattle, US. Initially, the company specialised in selling books online but has since evolved into a multi-industry platform. Today, Amazon is engaged in e-commerce, provides cloud computing services through Amazon Web Services (AWS), manufactures electronics (such as Kindle and Echo), and develops media services, including streaming and content production. The company held its IPO on 15 May 1997, listing its shares on the NASDAQ under the ticker AMZN.
Amazon’s revenue is based on several key segments, reflecting the company’s varied, multisectoral operations:
These diverse revenue streams enable Amazon.com, Inc. to remain resilient to changing market conditions and expand its influence across various sectors.
Amazon ended Q3 2024 with gains across key financial indicators. Below is the main report data:
Revenue by segment:
All key financial metrics showed growth in Q3 2024. The international segment saw increased sales, but costs also rose concurrently. As a result, it remained the most vulnerable and could be the first to incur losses in the event of even minor economic disruptions.
The North American segment made the most significant contribution to the company’s total revenue but also incurred the highest costs.
The AWS remained Amazon’s most promising and profitable division, demonstrating sustained growth and strong profitability.
For Q4 2024, Amazon forecasts revenue between 181.0 to 188.0 billion USD, representing a 7-11% increase compared to the corresponding period in 2023. Operating profit is expected to range between 16.0 and 20.0 billion USD, up from 13.0 billion USD a year earlier.
Amazon ended Q4 2024 with gains in key financial indicators. The report highlights are as follows:
Revenue by segment:
In comments to the Q4 2024 report, Amazon’s management provided forecasts for 2025, focusing on revenue, operating profit, and capital expenditures. In Q1 2025, revenue is expected to range between 151.0 and 155.5 billion USD, below the consensus forecast of 158.6 billion USD. Operating profit for this period is projected at 16.0 billion USD, also falling short of analysts’ expectations.
The company also announced significant growth in capital expenditures, which could reach 105.0 billion USD in 2025. This is a noticeable increase compared to 77.0 billion USD in 2024 and more than double the 48.0 billion USD spent in 2023. The primary investment focus is on infrastructure, including AWS cloud business expansion and the development of AI solutions.
AWS is expected to remain Amazon’s key growth driver in 2025 due to a trend of companies shifting to cloud infrastructure, the end of the cost optimisation phase and growing demand for AI solutions. The company calls artificial intelligence a once-in-a-lifetime opportunity.
The data shows that Amazon is betting on AWS and AI development and investing heavily in infrastructure. However, a weaker-than-expected revenue and operating income forecast for Q1 2025 discouraged investors, negatively affecting the share value.
None of the experts recommend selling Amazon shares.
On the monthly timeframe, Amazon.com stock broke above the upper boundary of an ascending channel, signalling potential further growth equivalent to the channel’s width. Based on Amazon.com stock performance, the following price movement scenarios for 2025 could unfold.
The primary forecast for Amazon.com stock suggests further growth towards the 270 USD resistance level. This could begin from the current level, or the stock price may decline to the 200 USD support level and, following a rebound, head upwards to 270 USD. Given the company’s cautious outlook for Q1 2025, a correction towards 200 USD is highly likely.
The alternative forecast for Amazon.com stock implies a breakout below the 200 USD support level, which could push the share price down to 150 USD. This scenario could materialise if revenue growth in the AWS segment slows, reinforcing investor concerns about AI monetisation and high AI-related spending, which may not generate returns.
Amazon.com stock analysis and forecast for 2025Investing in Amazon stock should be weighed against factors that may adversely affect the company’s revenue. The key risks are listed below:
Amazon’s Q4 2024 report and 2025 forecast reflect the company’s strong long-term outlook and short-term challenges. While key business areas, including AWS, AI, and e-commerce, continue to drive growth, the Q1 2025 forecast fell short of expectations, particularly in revenue and operating income.
A significant increase in capital expenditures, potentially reaching around 105.0 billion USD in 2025, indicates that Amazon is aggressively investing in AI and cloud infrastructure development, with AWS being the primary growth driver. Although the AI boom presents vast opportunities, it also involves inflated costs, and close attention must be paid to how effectively the company can monetise these investments.
Despite market volatility, Amazon remains a top pick for growth-oriented investors, with analysts overwhelmingly recommending a Buy or Strong Buy.
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.