Amazon Stock Crushed the Market in 2024. Can It Repeat in 2025?

Amazon.com Inc. (AMZN) stock has been on a tear in 2024, outperforming the broader market and its tech peers. The e-commerce giant's stock price surged by 28.37% year-to-date (YTD), compared to the S&P 500's 17.82% gain. But the question on investors' minds is: can Amazon maintain this momentum in 2025?

Amazon's strong performance in 2024 can be attributed to several factors:

1. Market dominance: Amazon's e-commerce market share in the U.S. reached 37.8% in 2023, more than double the market share of the next nine companies combined. This dominance has translated into increased revenue and profits, driving the stock price up.
2. AWS growth: Amazon Web Services (AWS) has been a significant driver of Amazon's stock price. AWS's revenue grew by 19% year-over-year in Q3 2024, and its operating income grew by 48.6% compared to Q3 2023. AWS's growth has been fueled by increasing adoption of cloud services and Amazon's continuous investment in infrastructure and new services.
3. Expansion into new markets and services: Amazon has expanded its presence globally, entering new markets such as India, the Middle East, and South Africa. The company has also entered new product categories, such as healthcare, entertainment, and AI. These expansions have contributed to Amazon's overall growth and stock performance.
4. Strategic acquisitions: Amazon has made numerous strategic acquisitions to expand its offerings and enter new markets. Some notable examples include the acquisition of Whole Foods Market, Zappos, and Twitch. These acquisitions have helped Amazon diversify its revenue streams and attract new customers.



As Amazon looks ahead to 2025, several trends suggest continued growth and potential for the stock price:

1. Growing e-commerce market: The global e-commerce market is expected to grow at a CAGR of 14.7% from 2021 to 2028. Amazon's dominance in this market, coupled with its continuous innovation and expansion, positions it well for future growth.
2. AWS expansion: AWS is expected to maintain its growth trajectory, driven by increasing adoption of cloud services and Amazon's continuous investment in infrastructure and new services. The global cloud computing market is projected to grow at a CAGR of 14.9% from 2021 to 2028.
3. Expansion into new markets and services: Amazon is continually expanding into new markets and services, such as healthcare, entertainment, and AI. These expansions can drive future growth and increase the company's market dominance.
4. Strong financial performance: Amazon's strong financial performance, as evidenced by its consistent revenue and profit growth, is likely to continue, supporting its stock price.

In conclusion, Amazon's market dominance in e-commerce and AWS, along with its strategic acquisitions and expansion into new markets, have driven its stock price to new heights in 2024. As the company looks ahead to 2025, several trends suggest continued growth and potential for the stock price. However, investors should remain vigilant and monitor the company's performance, as well as the broader market and economic conditions, to make informed decisions about their investments.