AWS VP on How AI Revolutionizes Contact Centers: Tech Disruptors
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7 hours ago
- Yahoo
AMZN Stock Forecast: 1 Way for Amazon to Boost ‘Billions' in New Revenue
Subscription-based services have become a dominant force in today's consumer economy, with companies like Netflix (NFLX) and Spotify (SPOT) leveraging recurring revenue models to drive growth and customer loyalty. But among all subscription giants, Amazon (AMZN) stands in a league of its own with its Prime, offering everything from expedited shipping and streaming to gaming and groceries, all under one roof. Now, Amazon may be on the verge of unlocking billions in new revenue through a strategic move that it has pulled off successfully in the past. Is Palantir Stock a Buy, Sell, or Hold for July 2025? Cathie Wood Is Pounding the Table on AMD Stock. Should You Buy Shares Now? Plug Power May Be Getting a Senate Lifeline. How Should You Play PLUG Stock Here? Our exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. Subscribe today! Analysts have zeroed in on Amazon's Prime membership as a potential catalyst for 'billions' of dollars in new revenue. For instance, JPMorgan notes that raising U.S. Prime membership costs from $139 to $159 (a $20 hike) in 2026, following Amazon's four-year cadence, could add roughly $3 billion in annual revenue. That's on top of an already massive subscription base. Amazon's subscription services segment (led by Prime) earned about $44.4 billion in 2024. With Prime members receiving $1,430 in annual value per JPMorgan's math, analysts expect strong retention even after modest price bumps. Based in Seattle, Amazon is the global e-commerce and cloud leader known for its vast online marketplace, cloud computing division (AWS), digital advertising, and subscription services like Prime. The company also develops consumer electronics, invests in artificial intelligence, and operates physical retail stores, logistics networks, and a growing media and entertainment arm. With a hefty market cap of $2.3 trillion, shares of the e-commerce giant have traded relatively flat for much of the year. However, after bottoming out on April 21, the stock has rebounded strongly alongside the broader market, rallying over 31% since then. Despite underperforming the broader market in recent months, Amazon continues to command a valuation premium relative to its sector peers. The stock currently trades at a forward price-earnings ratio of 35x, which is over 100% higher than the sector median of 17x, a clear signal of the market's confidence in Amazon's long-term growth potential and dominant market positioning. Amazon posted another strong quarter this year, with Q1 results that topped expectations and highlighted the company's growing profitability across the board. Net sales rose 9% year-over-year to $155.7 billion, just above guidance, with every major segment contributing to the growth. North America led the charge with $92.9 billion in sales, up 8%, while international sales grew 5% to $33.5 billion. AWS posted $29.3 billion in revenue, up 17% from a year ago, and its operating income jumped to $11.5 billion, up from $9.4 billion, a reminder that cloud continues to be Amazon's profit engine. Advertising was another bright spot, climbing around 18% to nearly $13.9 billion. That's impressive growth, especially considering it's a high-margin business that's becoming increasingly important to Amazon's overall earnings mix. On the profit side, operating income hit $18.4 billion overall, up 20% year-over-year, while net income surged to $17.1 billion, or $1.59 per share, well above last year's $0.98. Moreover, Amazon continues to show strong operating cash generation, with $113.9 billion over the trailing 12 months, up 15%. However, heavy investment spending brought free cash flow down to $25.9 billion. Management emphasized ongoing cost discipline, including a slowdown in warehouse expansion and tighter headcount controls, measures that seem to be paying off as profitability improves. Looking ahead, Amazon guided Q2 net sales in the range of $159 billion to $164 billion, which slightly beat Wall Street expectations. Wall Street analysts remain broadly bullish on Amazon, even as they weigh near‑term headwinds like macroeconomic uncertainty and a moderation in AWS growth. Among 54 analysts tracked by Barchart, the consensus rating is a 'Strong Buy,' with an average price target of $244.32, implying over 11% upside from current levels. Recently, JPMorgan's Doug Anmuth raised his price target to $240 (from $225), citing stronger‑than‑expected Q1 results, recent tariff relief, and confidence that a modest Prime fee hike could drive $3 billion in incremental revenue. Similarly, Morgan Stanley remains 'Overweight' with a $250 target, pointing to AWS's renewed acceleration and resilient advertising revenues as key catalysts. On the date of publication, Nauman Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
8 hours ago
- Bloomberg
Solana Staking ETF Approved For Debut
Bloomberg Crypto Show A Solana staking ETF has been approved for debut and is expected to be followed by a wave of crypto launches in the coming months. Bloomberg Intelligence's James Seyffart has the story. (Source: Bloomberg)
Yahoo
8 hours ago
- Yahoo
Don't Overthink It -- the Market-Beater to Buy and Hold for 5 Years
Investors don't have to risk their money on unproven companies when dominant names can still beat the market. Shares of this online tech titan have more than doubled since 2022. Investments in areas like robotics could fuel strong earnings growth to send the stock higher over the next five years. 10 stocks we like better than Amazon › It's no secret that buying and holding shares of high-growth companies can help you earn outstanding returns in the stock market. This approach usually requires you to spread your portfolio across many stocks to protect yourself in the event a company fails to live up to expectations. However, in recent years, the most dominant and profitable tech companies in the world have also been some of the best growth stocks to buy and hold for wealth-building returns. Their vast resources and leading technology have fostered innovation in emerging opportunities like artificial intelligence (AI) and robotics. With that in mind, the stock I would consider buying for the next five years is Amazon (NASDAQ: AMZN). Image source: Getty Images. If you look at Amazon's most recent quarterly sales growth, it's not impressive. Growth for its largest business, e-commerce, has slowed in recent years, bringing Amazon's total sales growth in Q1 to just 9% over the year-ago quarter. The stock has even underperformed the S&P 500 over the last five years, but it's easier to see where Amazon is headed by looking at its performance since 2022, when shares have more than doubled. There are good reasons why Amazon can continue climbing through 2030 and outperform the market. First, the company is still delivering double-digit growth in businesses that generate high margins and fuel strong earnings. The billions of people visiting every month are turning into a lucrative opportunity in advertising. Revenue from advertising services grew 19% year over year last quarter, generating $58.3 billion of high-margin revenue for Amazon over the last year. Amazon Web Services (AWS) is the leading enterprise cloud services provider. Custom AI chips and cutting-edge tools are helping client companies develop and build AI applications, driving incredible growth. AWS generated $111.8 billion in trailing-12-month revenue and grew 17% year over year last quarter. Strong growth from advertising, cloud computing, and other non-retail services is improving Amazon's overall margin profile, which will be a key catalyst for market-beating returns over the next five years. But this is only part of the reason why Amazon's earnings jumped 62% last quarter. Amazon's more than 200 million Prime members may not realize many of their recent orders were picked and handled in a warehouse by a robot. While Amazon still employs thousands of humans, it has rolled out over 750,000 robots across its fulfillment centers since 2012. This is playing a key role in lowering costs and speeding up order processing in the retail segment. The company is just getting started with robots too. As AI technology advances, so do the types of robots Amazon can use. Its Vulcan robot can sense the exact level of pressure to apply to an item to avoid damaging it. The arrival of humanoid robots that can walk and use synthetic hands for more intricate tasks could significantly increase productivity and lower costs for Amazon in the next decade or so. Amazon has been testing its most advanced robotics technologies in its new fulfillment center in Shreveport, Louisiana. Management noted earlier this year that it was very encouraged by what they were seeing in terms of improving speed, lowering costs, and increasing efficiency. As these improvements roll out to more facilities, investors should see Amazon continue to expand its profit margins. That said, investors shouldn't expect Amazon's earnings to grow in a straight line since it is also investing heavily in data centers and other infrastructure to support growth across its business, and such spending could result in lumpy profitability. But analysts currently expect Amazon's earnings to grow 16% annually over the next several years. Whether you look at price to sales, price to cash flow, or price to earnings, Amazon continues to trade within its historical valuation range and well below peak levels from the past few years. This suggest that investors may be overlooking Amazon's opportunity in areas like robotics, given how rapidly AI is advancing. With this wide-moat business combining strong growth in high-margin businesses like advertising and cloud services with an improving cost structure thanks to AI and robotics, Amazon is a no-brainer stock to buy and hold for the next five years and more. Before you buy stock in Amazon, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Amazon wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $966,931!* Now, it's worth noting Stock Advisor's total average return is 1,062% — a market-crushing outperformance compared to 177% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 30, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy. Don't Overthink It -- the Market-Beater to Buy and Hold for 5 Years was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
