$Amazon (AMZN.US)$ The stock's performance in 2025 has been lackluster. The share price of this e-commerce and cloud computing giant has risen by only 6% year-to-date, significantly underperforming the S&P 500 Index, which gained 18% during the same period. It also ranks as the worst performer among the 'Magnificent Seven'.
In comparison, the best-performing company among the 'Magnificent Seven', $Alphabet-C (GOOG.US)$ , has surged 66% this year, primarily driven by optimistic market expectations for its next-generation Gemini 3 model.
Analysts pointed out that the slowdown in sales growth of Amazon Web Services (AWS) and mixed opinions on the company's artificial intelligence (AI) commercialization capabilities are the main reasons for the mixed sentiment among investors.
Nevertheless, Wall Street remains strongly supportive of Amazon, with some institutions even listing it as one of their 'top picks' for 2026.
Mark Mahaney, a technology analyst at Evercore ISI, stated that he believes Amazon's stock has approximately 50% upside potential. Mahaney is one of several analysts on Wall Street who have designated the stock as a top pick.
Mahaney noted that multiple catalysts are gradually emerging, including reaccelerated growth for AWS, rising demand for the new Trainium AI chips, continued strong revenue growth in the advertising business, and the accelerated rollout of Alexa+.
He said, 'Fundamentally, Amazon remains a high-quality compound growth company (with an annual earnings per share compound growth rate of approximately 25%), featuring robust double-digit revenue growth, consistently expanding operating margins, and a potential significant inflection point in free cash flow within the next 24 months.'
Data shows that among the 67 sell-side analysts covering Amazon, 96% have assigned the stock a 'Strong Buy' or 'Buy' rating. The average price target set by Wall Street is $295, implying a 27% upside from current levels.
However, data from prediction markets indicates that retail investors hold relatively cautious views. Approximately 96% of users believe that by the end of January 2026, the stock price will not change significantly compared to its current level.
JPMorgan analyst Doug Anmuth, while also on the bullish side, offered a relatively conservative outlook, suggesting that Amazon's stock still has approximately 30% upside potential.
Anmuth's investment thesis for Amazon is similar to Mahaney's, but he further highlighted that a seven-year, $38 billion cloud services agreement between Amazon and OpenAI could provide additional upside to the company’s revenue.
Anmuth stated, "Amazon is one of the most diversified giants in terms of revenue and profit structure, with multiple large-scale growth opportunities — its valuation remains attractive amid divergent market sentiment."
Editor/Doris