Amazon Stock Finally Hit a Record High After 3 Years. Can It Keep Going Up?

Amazon Stock Finally Hit a Record High After 3 Years. Can It Keep Going Up?

Did you know that until recently, Amazon (NASDAQ:AMZN) Was the stock still off its 2021 highs? Amazon stock last hit its highest level in July 2021, almost three years ago. Even though Amazon stock gained 81% last year, in 2024 it remained almost 20% below its peak.

It finally surpassed that figure in April. Can this continue?

Wait, Amazon stock is down?

Amazon shares fell during the previous bear market, and they have climbed again since last year’s low point. It surpassed its previous record in April this year and reached a new high last week.

Amazon Stock Finally Hit a Record High After 3 Years. Can It Keep Going Up?

AMZN Chart

Now that Amazon shares are trading at their highest levels ever, is it time to buy?

Is AI the biggest tailwind Amazon has ever seen?

Amazon shares have reached record highs several times in the past and surpassed them by leaps and bounds. If an investor had sold their securities at previous highs, they would have missed out on incredible gains. This new high doesn’t mean the climb is over – it means investors currently have a lot of confidence in Amazon’s potential.

The main driver of this trust is that of Amazon, it is artificial intelligence (AI). Amazon is investing heavily in its AI technology to support Amazon Web Services (AWS) and e-commerce providers. The company has used AI for decades, but since the launch of ChatGPT and the resulting interest in generative AI, Amazon has unveiled its own high-profile solutions. it offers different levels for each type of user, from technology allowing developers to create their own Large Language Models (LLMs) to solutions allowing non-technical people to enter their information and create complete web pages, complete marketing campaigns, and much more. And of course, Amazon uses AI in its own operations. It can identify buyer preferences based on search history and more, providing side-by-side comparisons to help customers make decisions and drive higher sales. It also uses AI in its advertising business, where it gives advertisers perhaps the ideal platform to attract customers where they are already looking to spend money.

The potential for what AI can do for Amazon’s business is considerable, creating a huge untapped well of business for Amazon.

There is everything else

Amazon is a leader in several areas, starting with its main activity of e-commerce. Amazon’s lead is so huge, with nearly 40% of total e-commerce in the United States, that it would not be possible for a competitor to come close in the near future. He also continues to improve as he grows. As it makes faster deliveries, more customers rely on it to make more purchases, deepening its already wide moat.

AWS is the world’s largest cloud computing company, with 31% of the market, and it regularly adds new high-profile customers to the platform as well as expanded agreements with current customers. Amazon recently opened a new $10 billion AWS facility in Mississippi and began investing another $10 billion in Mexico and Saudi Arabia, and it still feels like it’s just scratching the surface the surface of opportunity.

It’s a major player in streaming, with its own major film studio. It acquired MGM Studios in 2021. It is working on developing a healthcare business and has several smaller segments that add to the total.

A new peak, and many more to come

Amazon has a market cap of $1.9 trillion, but investors aren’t worried about even bigger growth. 62 out of 65 Wall Street analysts rate it as a Buy at present, with the remaining three rating it as a Hold. The average Wall Street consensus price target is for Amazon stock to gain 21% over the next 12 to 18 months, with a high of 94%.

Amazon stock may have hit a new high, but expect more to happen in the future.

Should you invest $1,000 in Amazon right now?

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool posts and recommends Amazon. The Mad Motley has a disclosure policy.

Amazon stock has finally reached a record high after 3 years. Can it continue to increase? was originally published by The Motley Fool

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