Even if 2025 doesn’t quite meet expectations, Amazon’s future prospects remain strong.
While Amazon has typically thrived as a growth stock, its recent performance has been, well, a bit lackluster for many investors. By the end of 2025, the company’s shares had climbed 5%, actually surpassing various competitors from the “Magnificent Seven,” the S&P 500, and the Nasdaq Composite.
It’s been a tough year, but I wouldn’t give up on Amazon just yet. In fact, this might be an opportune moment to increase investment in its stock since the overall market seems to underestimate it. If you’re contemplating an investment, here are three reasons why it might be worth considering Amazon.
1. E-commerce is becoming more profitable
Most people have heard of Amazon’s e-commerce operations, but fewer realize how much the segment has historically lost. While Amazon pulls in revenue through e-commerce, it hasn’t always generated profit from it without support from other business divisions.
Interestingly, the e-commerce arm appears to be flipping the script, heading toward more reliable profitability. Robotics and automation are key players in this shift. It’s unfortunate for those affected by job losses, but from a business standpoint, these advancements are set to save Amazon billions in operating expenses.
Research from Amazon suggests that by the close of this year, it will have opened 40 automated fulfillment centers, potentially yielding savings of up to $4 billion. Additionally, Morgan Stanley projects that by 2030, Amazon might save around $10 billion annually if a significant portion of U.S. orders processes through its next-gen warehouses.
In the middle of 2025, Amazon revealed it would deploy over a million robots within its global fulfillment network.
2. AWS is boosting its computing capabilities
Amazon Web Services (AWS) remains the company’s largest revenue driver and the leader in the cloud space. However, it has seen some slowdown as competition from Microsoft and Google’s Alphabet rises.
The sluggish growth in AWS wasn’t entirely unforeseen given its scale. Still, achieving 17% to 20% year-over-year growth over the last four quarters isn’t alarming, even if it’s less than other platforms. It’s actually decent in context.
Amazon is funneling substantial resources into AWS, preparing to meet the increasing demands of the AI sector. Over the past year, it has added 3.8 gigawatts of computing capacity, with plans to double that by 2027.
That increase in computational power is crucial for AWS as it works to minimize backlogs and attract more clients. Think of AWS as a highway; adding more computing power is akin to adding another lane. In 2025, Amazon’s projected capital expenditures will likely exceed $125 billion, which is a hefty jump from the $83 billion spent in 2024. That’s a significant investment, but these expenditures could bear fruit in the long run since AWS will continue to serve a major role in the internet landscape, even as AI demand fluctuates.
3. A profitable business model is budding at Amazon
While e-commerce and AWS obviously grab a lot of attention, advertising is quickly emerging as a profitable venture for Amazon. In Q3 of 2025, it generated $17.7 billion in ad revenue, up 24% from the previous year, marking it as the company’s fastest-growing segment recently.
Amazon possesses a wealth of data regarding its diverse customer base, including shopping and viewing habits, which is advantageous for forming predictions about consumer behavior. This data allows advertisers to create more targeted campaigns across platforms like Amazon.com, Prime Video, Twitch, and Freevee.
While it’s tough for Amazon to tap into markets dominated by Google or Meta platforms, the ad segment is likely to grow significantly in the future. This emerging third revenue source is crucial for enabling Amazon to support its other business divisions that might be less profitable or carry greater risk.
