Amazon's Hidden Growth Engine: Why AMZN is Poised to Dominate AI-Driven Marketing and Streaming

Amazon's stock (AMZN) trades at $223.41 as of June 2025, nearly 8% below its February 2025 all-time high of $242.06. This sub-ATH valuation overlooks a seismic shift: Amazon is quietly building a $100 billion AI-driven marketing and content powerhouse that could redefine digital advertising and streaming media. With synergies between its AI tools, AWS infrastructure, and streaming partnerships, Amazon is primed for transformative growth. Here's why investors should buy now—and why the market is missing the upside.

AI Marketing: The "Beast Mode" Playbook

Amazon's “Beast Mode” initiatives are its most underappreciated growth lever. The company has invested $100 billion in AI for 2025, deploying tools like Alexa+ and Rufus to revolutionize e-commerce and advertising.

• Alexa+: This AI-powered voice assistant, built on generative large language models, acts as a personalized shopping guide, remembering preferences and contextualizing complex queries. For example, it can answer, “What's the best budget drone for aerial photography?” with tailored recommendations.
• Rufus: An in-browser AI assistant, Rufus refines search results using Amazon's vast product data and external sources. Together, Alexa+ and Rufus reduce friction in the shopping journey, driving conversions and ad relevance.

Amazon's ad business grew 19% YoY to $13.9 billion in Q1 2025, yet the stock trades at a P/E of just 100.09—far below peers like Microsoft (28x) and Alphabet (25x). This disconnect suggests the market underestimates AI's potential to supercharge ad efficiency. By 2025, AI-driven tools like Multi-Touch Attribution (MTA) and Long-Term Sales (LTS) metrics are enabling advertisers to optimize campaigns in real time, boosting ROI and brand loyalty.

Streaming Media: Beast Games and the Rise of AI-Enhanced Content

Amazon's streaming ambitions are equally ambitious. Its partnership with Beast Games, a reality show starring YouTube megastar MrBeast, exemplifies its strategy to blend viral content with Prime Video's scale.

• Beast Games: With 50 million viewers in its first season, the show leverages MrBeast's 391 million YouTube subscribers to drive Prime Video adoption. Season 2, set in New Vegas, and Season 3's expanded stakes highlight Amazon's ability to monetize high-engagement content.
• AI-Driven Content Production: Amazon's AI Creative Studio and Video Generator tools automate content creation, reducing costs and enabling rapid scaling. For instance, AI can generate 3D product demos or localized ads in minutes—a stark contrast to traditional workflows.

The synergy here is clear: AWS provides the cloud infrastructure to process petabytes of content data, while AI tools like Amazon Bedrock (powered by Anthropic's Copilot) refine recommendations and ad targeting.

Greenbids: The Missing Piece of Amazon's Ad Tech Stack

The $65 million acquisition of Greenbids in 2025 is often overlooked but critical to Amazon's ad dominance. Greenbids' AI platform optimizes programmatic ad campaigns for efficiency, reducing carbon footprints and improving ROI.

• Why It Matters: Programmatic ads account for $140 billion in global spend, yet inefficiencies plague the sector. Greenbids' algorithms now integrate with Amazon's Retail Ad Service, enabling brands to bid smarter and target audiences with surgical precision.
• Cross-Selling Synergy: Greenbids' tools also align with Amazon's AWS Advertising Solutions, which offer ad tech infrastructure to third-party retailers. This creates a full-stack ad ecosystem where Amazon owns data, tools, and distribution—unmatched by Meta or Google.

AWS: The Secret Sauce for Scaling AI and Streaming

Amazon's cloud division, AWS, is the backbone of its AI ambitions.

• AI Infrastructure: AWS's Trainium and Inferentia chips cut training costs for large language models by 50%, while Amazon SageMaker streamlines AI deployment. These tools underpin everything from Alexa+ to Greenbids' ad optimization.
• Streaming Scalability: AWS's global data centers ensure Prime Video can handle live events like NFL games or NBA streams without buffering—a key factor in its 11-year deal for 65+ regular-season games.

AWS revenue hit $29.3 billion in Q1 2025 (+17% YoY), yet its margin expansion (10.6% in Q2) is underpriced in Amazon's stock.

Investment Thesis: Buy AMZN Before the Catalysts Hit

Amazon's stock is undervalued because the market hasn't yet priced in the synergy between AI, ad tech, and streaming. Key catalysts loom:

1. Q2 Earnings (July 31, 2025): Analysts project $164.2 billion in revenue (+11% YoY), with ad revenue potentially surpassing $15 billion. A beat here could revalue the stock.
2. Prime Day 2025: Extended to 96 hours, it's projected to generate $21.4 billion in GMV—a 60% YoY surge. Alexa+'s role in personalized deals could drive record sales.
3. AWS and AI Expansion: Amazon's $100 billion CapEx in 2025 will fuel AI copilot ecosystems and cloud services, creating barriers to entry for competitors.

Risk Factors: Near-term headwinds include margin pressures and regulatory scrutiny. However, Amazon's 10.6% operating margin in Q2 shows resilience.

Conclusion: AMZN is a Buy at $223.41

Amazon's stock trades at a discount to its peers and its own potential. The $242.06 all-time high is a near-term target, but long-term investors should aim higher. With Truist's $250 price target implying 13% upside—and catalysts like Q2 earnings and Prime Day—this is a strong buy.

The undervaluation won't last. Amazon's AI-driven marketing, streaming dominance, and AWS-powered scalability are creating a moat that few can match. Investors who buy now will capture the next wave of tech-driven growth.

Recommendation: Buy AMZN at $223.41 with a 12-month target of $250. Risk-averse investors may wait for post-Q2 earnings momentum.