Amazon (AMZN) stocks had a tough month last month, falling 11% in February. Amidst the recession in most markets in February, AMZN’s size made inventory stand out even more. The company reported its 2024 financial results on February 6th. However, investors have looked deeper into the numbers and found some information that has created concerns about Amazon’s future.
In particular, some analysts and investors were concerned about the $100 billion expense soon. Amazon Inc (AMZN) is looking to continue its AI investments with an additional $100 million investment. According to Business Insider, the company’s efforts to create internally developed AI models with sophisticated inference capabilities are nearing realisation. The inference model is almost complete, but the development of its own AI agent remains at its previous stage.
Investment is a step in the right direction for Amazon’s AI hopes, but some investors are left with concern about how investments can eat into AMZN’s profits. This is a sudden cost for a still developing industry. The company spent $48.1 billion and $77.7 billion on capital expenditures in 2023 and 2024, respectively. Spending more than $100 billion is an important step from there. If you spend a lot of companies on AI, it can damage your profit margins, which may be something investors are worried about.
On Thursday, Amazon and many other stocks reduced the stock’s significant value. In fact, the company’s shares fell by more than 4% due to a flood of uncertainty and geopolitical tension. As the weekend arrived, AMZN shares fell 13% over the past 30 days. Additionally, Amazon management expects operating profit for the full year of 2025 to fall by $700 million compared to 2024. Therefore, it may be effective for investors to worry about AMZN’s performance in 2025.
Many companies have the same potential, but they don’t boast the same safety. In fact, that’s why some experts have begun calling Amazon (AMZN) the best low-risk stock of 2025. Specifically, the stock currently holds a purchase rating from 95% of the 74 analysts surveyed by CNN. Furthermore, only 1% issued a selling rating. It has a price target of $285 for the next 12 months. AWS is expected to continue to contribute to businesses, and its operating income is also increasing. It’s a business with a higher margin than the retail sector. That growth is not expected to halt anytime soon, and stocks could surge in the second half of 2025 if AI investments bring benefits.
