Over almost three decades in the stock market, Amazon (AMZN) has proven to be one of the most lucrative investments a person could make. Since its initial closing price, it has skyrocketed over 233,000%, which means that if you had invested $1,000 back then, your investment would be worth approximately $2.33 million today.
However, the growth saga is far from over. There are numerous indications that Amazon’s shares could still climb higher. Let me share the most compelling reason for this optimism.
There is a shift to the cloud
As an observer, I consistently notice CEO Andy Jassy emphasizing the transition towards cloud services. This area is spearheaded by Amazon Web Services (AWS), Amazon’s global leader in cloud solutions, controlling approximately 30% of the market, as reported by Statista. Remarkably, it ranks among Amazon’s swiftest-expanding sectors, reporting a 17% growth during the first quarter of 2025. Notably, this segment contributes significantly to Amazon’s operating earnings, accounting for an impressive 63% in the said quarter.
As stated by Jassy, cloud services currently account for a relatively minor portion of the company’s overall Information Technology (IT) expenditure. Nevertheless, he anticipates that this proportion will significantly increase in the coming 10 to 20 years, with the majority of IT spending shifting towards the cloud.
If clients were initially considering transitioning before the arrival of generative AI, their curiosity has significantly intensified given its emergence, as the cloud environment offers the maximum potential for interacting with and deriving benefits from AI. This organic development serves as a significant catalyst for Amazon, and it becomes increasingly vital for their financial performance.
Amazon plans to invest over $100 billion this year (2025) in strengthening its AI sector, aiming to provide the most competitive platform and stay ahead of competitors. Given the anticipated shift towards cloud computing over the next 10-20 years, Amazon is poised to reap significant benefits from this transition. As a result, purchasing Amazon stock could be advantageous.
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2025-07-24 11:18