Amazon's AI-Driven Resurgence: Why Chase Coleman Sees 30% Upside in the Tech Giant

Chase Coleman, co-founder of Tiger Global Management, has long been a contrarian investor in technology, focusing on companies with long-term structural advantages amid short-term turbulence. amazon.com Inc. (AMZN) fits this mold perfectly. Despite a 14% year-to-date decline in 2025 due to trade war anxieties, Coleman’s $1.41 billion stake in Amazon reflects a conviction that the company’s AI-driven transformation will deliver a 30.91% upside over the next year. This article dissects the catalysts and risks behind this bold bet.

The Case for Amazon: A Foundation of Scale and Innovation

Amazon’s Q1 2025 results underscore its resilience. Revenue hit $155.67 billion, narrowly exceeding estimates, while EPS of $1.59 beat forecasts. The real story lies in its segments: advertising revenue grew 19%, and AWS—its cloud division—generated $29.27 billion in revenue, up 17% year-over-year.

AWS remains the linchpin of Amazon’s value. It commands a 40% share of the global cloud market, a space projected to reach $800 billion by 2028. With AI workloads demanding vast computational resources, AWS’s scale and leadership position it to capture the bulk of this growth.

The AI Catalyst: Triple-Digit Revenue Growth

Amazon’s AI investments are now entering a payoff phase. The company is developing custom AI chips to reduce reliance on third-party suppliers like NVIDIA, a move that could lower costs and boost margins. Meanwhile, AI revenue—though still small—is growing at a triple-digit annual rate. This aligns with Wedbush’s bullish view: the firm recently raised its price target to $235, citing Amazon’s ability to “monetize AI across retail, advertising, and cloud.”

Coleman’s focus on AI-infused tech stocks is clear. While Amazon ranks 10th among his top picks, its AI initiatives are among the most ambitious. For comparison, NVIDIA—a pure-play AI chipmaker—ranks higher, but Amazon’s diversified revenue streams and $155 billion revenue base offer stability.

Navigating Near-Term Headwinds

The stock’s 14% YTD decline in 2025 stems from two key risks:
1. Trade War Exposure: 18% of Amazon’s goods are sourced from China, making it vulnerable to tariffs.
2. Market Sentiment: The broader tech sector fell 8% early in 2025, dragging down valuations.

Yet Coleman’s long-term lens mitigates these concerns. The company’s 30,000-employee R&D team and $40 billion annual investment in innovation ensure it can weather macro headwinds. Additionally, AWS’s 20% annual growth rate in cloud infrastructure—a $330 billion market in 2023—provides a steady revenue base.

Why the 30% Upside?

The 30.91% upside target reflects Amazon’s dual engines of growth:
- AWS Dominance: Its cloud business is projected to grow to $100 billion in annual revenue by 2027.
- AI Monetization: Custom chips and AI tools could unlock new revenue streams, such as specialized cloud services for generative AI models.

Analysts also highlight Amazon’s balance sheet: $22 billion in cash and equivalents provide flexibility to acquire AI startups or invest in R&D.

Conclusion: A Decade-Long Play on AI

Chase Coleman’s stake in Amazon is a bet on the company’s ability to lead the AI infrastructure boom—a $2 trillion opportunity by 2030. While near-term risks like trade tensions and sector volatility linger, Amazon’s scale, cash flow, and R&D prowess position it to dominate the next tech cycle.

With a 30.91% upside potential and a Wedbush price target of $235—$25 above current levels—the stock appears attractively priced. For investors with a multi-year horizon, Amazon’s AI-driven renaissance may prove as transformative as its dominance in e-commerce.

Ask Aime: What's Tiger Global's bet on Amazon's AI future?