Investing.com-Amazon shares achieved a strong effect in 2024, surpassing both Nasdaq and e-commerce sector with an increase of 44%, compared to 25% for Nasdaq. This jump is supported by an expansion in the price and sales ratio, which increased from 2.3x early 2024 to 3.1x.
The Bank of America analysts highlighted the Amazon Web Services (AWS) and the growth of retail margins as two basic drivers of Amazon success (Nasdaq :). They anticipate that cloud growth encouraged by artificial intelligence to remain a significant opportunity in the 2025 sector.
Moreover, the expansion of retail margins is expected to continue to encourage the growth of profit that outweighs the one in Amazon’s competitors. Analysts also noticed that Amazon was positioned to cope with the influence of an American dollar appreciation, which could benefit the cloud margin.
Looking in advance by 2025, Bofa identified several positive investments in Amazon shares. These include a strong cycle of artificial intelligence intelligence, further efficiency of retail margins, a perennial productivity cycle guided by robotics, increasing Prime video advertising revenue, saving costs at medium level and normalization of online retail that fulfills or exceeds the expectations for the neighborhood and the Holiday and Holidays season.
At the same time, the investment bank also highlighted potential risks. These are the influence of new tariffs on quantities and margins, investments in new areas such as the Kuiper project that could stifle marine progress and increased expectations and possible pressure on AWS margins.
The growing competition of Walmart (NYSE 🙂 and a relatively high assessment compared to Amazon’s historical ratios of price and sales and prices and earnings is also emphasized. Moreover, with 79 ratings of buying, Amazon seems to be a consensio favorite shares, which could represent its own series of challenges.
As for Customs, media reports show that the new customs duties will not be signed on the first day of President Trump on duty. Instead, the administration plans to issue an extensive trade memorandum to study potential overhaul with China, Mexico and Canada.
In the light of these positive and negative sides, Bofa slightly reduced his estimates for Amazon for 2025. Due to the recent service of US dollar, reducing the forecast of international revenue by approximately $ 7 billion. This adjustment is partially offset by slightly higher AWS marriages.
For 2025. Bofa estimates income/profit/GAAP EPS at 700 billion USD/79.5 billion USD/6.10 USD, slightly lower than the previous 707 billion USD/79.9 billion USD/6.13 USD. Even with these adjustments, Bofa still expects Amazon to show more stable revenue growth compared to the previous year in the first half of 2025. And a better increase in margins than competitors with great capital.
The company continues “to see Amazon as a relatively strong game on AI”, analysts led by the Justin post said in a note.
