Amazon (AMZN) Soars 2.25% on AI Growth, Strong Earnings

Amazon's (AMZN) stock price surged to its highest level since February 2025 today, with an intraday gain of 2.25%.

Analysts from TD Cowen have expressed optimism about Amazon, citing the company's growth in artificial intelligence (AI) and retail sectors. They have set a target price of $250 for the stock, positioning Amazon as one of the top AI investments for investors.

Amazon's cloud computing division, Amazon Web Services (AWS), has demonstrated robust performance. AI is identified as a significant growth driver for AWS, contributing to the overall strength of Amazon's cloud services.

Morningstar's analysis underscores Amazon's retail business as having a wide economic moat. This advantage is attributed to network effects, technological capabilities, and the extensive scale of its operations. Amazon Prime memberships play a crucial role in creating a strong network effect, generating high-margin revenue streams.

Lakehouse Capital reported that Amazon had a strong quarterly performance, with net sales increasing by 9% year-on-year and operating profit rising by 20%. AWS grew by 17%, driven by strong demand despite a slight deceleration compared to previous quarters. AI continues to be a key growth driver for the company.

Amazon's stock experienced a slight dip at the start of its longest-ever Prime Day event. Sales were projected to grow by 60% according to one analyst. However, early Prime Day sales were reported to have dropped by 41%, which might not necessarily indicate a long-term negative impact on the stock.