Amazon has already become one of the world’s largest companies. But could its Will stock AMZN outpace the market in the next five years? Some analysts believe so, focusing on the tech giant’s innovations in artificial intelligent (AI).
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These are four reasons AMZN would be a great addition for your portfolio
A Underrated AI Play
2024 will be the year of AI, dominated by Nvidia. Amazon is a better long-term investment, according to some experts. The company invests more in its business than any other large tech company. It spent $75 billion in capital expenditures alone in 2024. Amazon has invested a large portion of its investment in creating a flagship AI training chip line. Manufacturing Digitalreports that it has hired top semiconductor engineers to expand its building teams in Austin, Silicon Valley and other areas. The early results look promising. Forbes reported that Amazon’s AI chip shows 30% to 40% higher price performance than current GPU based instances, which may threaten Nvidia dominance. Apple and Anthropic are already committed to using Amazon’s new chips to train models.
Amazon launched six large language models that produce images, video and text. They can cost up to 75% less than other models such as ChatGPT or Claude.
How to Get a 10% ROI (Return on Investment): 10 Proven MethodsExpansion into More Industries
AI Innovations represent only a small part of Amazon’s potential for growth. The company’s expansion and optimization of operations never seem to stop — as shown by industries such as:
- Pharmaceuticals;
- Small Business Lending;
- Fulfillment and Delivery for Businesses;
- On-line Groceries and Payment Processing.
Amazon could disrupt any industry with its cutting-edge technologies and robust distribution network. In the next five-year period, Amazon could generate billions in new revenue through bold initiatives.
Customer loyalty through Prime
Another major advantage for Amazon is customer loyalty.
Around 200 million Amazon Prime members enjoy discounts on everything, from ecommerce deliveries to audiobooks. These savings encourage loyalty, particularly among Amazon’s large, younger user base. They also make it easier for Amazon to expand.
Amazon’s recent entry into the healthcare industry with One Medical and Amazon Pharmacy will disrupt it by increasing access and lowering cost — and these lower costs can both inspire loyalty in existing members and attract new ones.
The E-commerce Industry is Still Growing
Don’t forget Amazon’s core business, e-commerce. Analysts claim that the ecommerce industry continues to grow, with sales projected to represent 41% in global retail by 2027. Amazon could benefit the most from the ongoing shift in consumer demands, given its dominance in e-commerce. Should You Invest in Amazon?
Amazon has a unique position to excel in the next decade. Analysts believe that Amazon’s enviable loyalty to customers, its breakthroughs in AI, and its impressive strategic expansion are all reasons to bet on it. Like any stock, it’s impossible to predict the price of AMZN in five years.
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Originally published on GOBankingRates.com.How Much Would I Save if I Cut My Credit Card Interest to Low APR for a Year?
