Amazon (AMZN) Stock Plummets as AWS Loses AI Cloud Dominance—Tech Giant Stumbles in Critical Battle

AWS just got served a brutal reality check in the AI arms race.

The Cloud Crumbles

Amazon's crown jewel is bleeding market share as rivals outmaneuver them in artificial intelligence infrastructure. While Bezos' empire was busy counting retail dollars, competitors built next-gen AI stacks that leave AWS looking like legacy hardware.

Numbers Don't Lie

Investors aren't sticking around to see if Amazon can play catch-up. The stock's nosedive tells the whole story—when you miss the AI wave, you drown in yesterday's tech. Wall Street's patience for 'future potential' evaporates faster than cloud credits when actual revenue growth stalls.

Wake-Up Call or Death Knell?

This isn't just a bad quarter—it's an existential threat. Amazon either reinvents its cloud business overnight or becomes the next IBM: a giant that dominated the past but got disrupted into irrelevance. The cloud war just entered its AI phase, and Amazon's showing up with peashooters.

Maybe they should've spent less on space joyrides and more on GPU clusters. Just a thought.

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Part of the concern comes from leadership shifts in artificial intelligence. Arm Holdings (ARM) hired Rami Sinno, who was Amazon’s director of AI chips and led the development of its Trainium and Inferentia processors at Annapurna Labs. The MOVE represents a potential setback as Amazon works to expand its role in advanced computing.

Market Performance Trails Peers

Part of the ongoing concerns stems from the slowed growth in Amazon Web Services (AWS) compared to its rivals. In the second quarter of 2025, AWS reported 17% revenue growth. Microsoft Azure (MSFT) grew by 39% while Google Cloud (GOOG) gained 32%. According to analysts, Amazon holds about 30% of the global cloud share, while Microsoft has reached close to 20%. Projections now suggest Azure could pass AWS by 2026 if current trends hold.

Moreover, Amazon has set a plan to spend about $100 billion in 2025 with a focus on cloud and AI capacity. However, investors have yet to see clear signs of payoff from these investments. Amazon has introduced projects such as DeepFleet for robotics optimization and Bedrock AgentCore for secure AI use. Still, these have not gained the same level of attention as products from Microsoft or Meta (META).

Yet Wall Street remains positive on the company. More than 90% of analysts maintain buy ratings, citing Amazon’s strong scale and long-term prospects. For many, the stock’s weaker performance in 2025 is seen as a pause rather than a lasting change in its outlook.

Is AMZN Stock a Buy?

As stated above, Amazon is boasting a strong bullish sentiment among Wall Street analysts, with 45 out of 46 rating it a Buy. The average AMZN stock price target stands at $264.38, implying a 15.95% upside from the current price.