Amazon Stock in 2025: A Decade-Defining Buy or Overhyped Bet?
Wall Street's favorite retail giant just hit another trillion-dollar milestone—but can Bezos' empire keep delivering for shareholders?
The Bull Case: Cloud Kings & Cash Machines
Amazon Web Services now dominates 34% of the cloud market, while Prime subscriptions crossed 250 million globally last quarter. Those recurring revenue streams print money faster than the Fed's dollar printers.
The Bear Trap: Regulatory Targets & Retail Fatigue
With antitrust lawsuits piling up and TikTok Shop eating into e-commerce margins, even Alexa might struggle to spin this narrative. Remember when analysts thought 'drone deliveries' would happen before 2020?
The Bottom Line
Amazon remains the ultimate 'disrupt or die' play—just don't expect those 2021 pandemic-era gains to repeat. As always, the stock will moon right after you sell or crash right after you buy. That's how this casino works.
Image source: Getty Images.
Growth is picking up
During Q2, Amazon's top line grew at a 13.3% year-over-year rate. This was an acceleration compared to the first quarter, which is obviously an encouraging sign. What's remarkable is that the business is expanding at a strong clip, despite collecting a massive $670 billion in net sales in the last 12 months. Even at its current size, growth is still a part of the Amazon story.
The North America segment posted an 11% revenue gain. This was the fastest expansion rate since Q1 2024. The company had its biggest Prime Day ever. It also expanded same-day and next-day delivery in the U.S.
Amazon's digital advertising segment deserves some attention. Revenue soared 22% to $15.7 billion. This is becoming a more important money-maker for the company. Amazon is behind onlyandwhen it comes to digital ad sales.
Investors who believed that Amazon's growth engine was slowing got a pleasant surprise. Perhaps the business still has many years left of double-digit revenue gains as we look ahead.
Is AWS losing its luster?
The most exciting part of Amazon has nothing to do with online shopping or digital advertising. Instead, it's Amazon Web Services (AWS), the cloud computing platform with industry-leading market share, that investors seem to focus on the most. The latest financial update might have given shareholders a reason to be cautious.
AWS registered 17.5% year-over-year revenue growth to $30.9 billion. That number was slightly ahead of analyst estimates. However, it's worth pointing out that the two biggest rivals,Azure and Alphabet's Google Cloud, are both growing at much faster rates. This means that AWS is losing market share.
What's more, AWS' operating income increased by just 9.7%, lower than the revenue gain, as expenses crept up. But CEO Andy Jassy remains very confident on the opportunity AWS has.
"I say this frequently, but remember that 85 to 90% of worldwide IT spend is still on premises versus in the cloud," he pointed out on the Q2 2025 earnings call.
There will also continue to be robust demand from customers looking to use the expanding set of artificial intelligence (AI) tools.
For what it's worth, investors must get comfortable with the amount of spending happening, as Amazon could undertake almost $120 billion in capital expenditures just this year. If the business didn't do this, then it WOULD risk falling behind in the AI race.
Buy the dip
As of Aug. 4, shares of Amazon trade 13% below their peak from February. I view this dip as a smart buying opportunity. Investors have the chance right now to add one of the world's top companies to their portfolios at a time when the market is pessimistic about the latest financial results. Over the long term, this business will remain a dominant tech leader, even though the numbers each quarter could vary substantially. I still think patient investors should be rewarded.
