The Investment.com – Amazon Stock Shows a strong performance in 2024, outpacing the Nasdaq and the eCommerce sector with a 44% gain, compared to 25% for the Nasdaq. This flow is supported by an expansion of the price-to-sales price, which increases from 2.3x at the beginning of 2024 to 3.1x.

Bank of America analysts point to Amazon’s (AWS) web services and retail margins as two fundamental drivers of Amazon’s (Nasdaq 🙂 Success. They anticipate that AI-GUSTO cloud growth will remain a significant opportunity within the sector in 2025.

In addition, crop margin expansion is expected to continue to drive profit growth above Amazon’s peers. Analysts also mentioned that Amazon has been able to manage the impact of the appreciation of the US Dollar, which could benefit cloud margins.

Looking ahead to 2025, Bofa identified several investment positives for Amazon stock. This includes a strong AI-Demand cycle for AWS, increased retail margin efficiencies, a multi-year advertising campaign, an increase in advertising revenue in Management hours met or exceeded expectations for the fourth quarter and holiday season.

At the same time, the Investment Bank also plans potential risks. This is the effect of new tariffs on volumes and investors, investment in new areas such as the Kuiper project that may prevent margin growth, and possible margin growth.

Increased competition from Walmart (NYSE:), and a relatively high valuation compared to Amazon’s historical price ratios and price-to-conachings. Additionally, with 79 buy ratings, Amazon appears to be a consistent favorite stock, which may present its own set of challenges.

Regarding tariffs, media reports indicate that no new tariffs were signed on President Trump’s first day in office. Instead, the administration plans to issue a broad trade memo to study potential overhauls in China, Mexico, and Canada.

Due to these positives and negatives, BOFA slightly estimates for Amazon due to the recent appreciation of the US Dollar, which reduces to $ 7 billion. This adjustment is partially offset by slightly higher AWS margins.

During 2025, Bofa estimates revenue / profit of $ 700 billion / $ 79.5 billion from the previous $ 707 billion / $ 79.13. Even with these adjustments, BOFA still expects Amazon to show stronger year-over-year growth in the first half of 2025 and better margin growth in the older peers.

The company continues to “Amazon as a strong play in AI,” analysts led by Justin Post said in a note.