Why Investors Should Consider Holding or Buying Amazon Stock Now

Amazon‘s (NASDAQ: AMZN) share price has increased by 38% over the past three years, matching the performance of the S&P 500 during the same period. For many investors aiming to outperform the market, this prompts the question: What should be the next move regarding Amazon’s stock?

There are compelling reasons to either hold onto your Amazon Stock or consider purchasing shares now. Here are three reasons to buy (or keep holding) Amazon stock moving forward into 2025.

Where to invest $1,000 right now? Our analyst team has identified the 10 best stocks to buy at this time. Learn More »

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Cloud Computing Opportunities in AI

Amazon’s recent fourth-quarter results disappointed some investors, particularly as its Amazon Web Services (AWS) revenue reached $28.79 billion, slightly trailing Wall Street’s expectation of $28.84 billion. Nonetheless, this reflects a 19% increase from the previous year, contributing to 50% of the company’s total operating income.

Those who reacted negatively may have overlooked Amazon’s expansive cloud opportunities. AWS maintains a commanding lead in the cloud market, holding 31% of the market share compared to Microsoft, which has 20%.

This position uniquely positions Amazon to capitalize on the burgeoning demand for artificial intelligence (AI) cloud computing. Companies are competing for the most advanced AI services, and Goldman Sachs estimates that the global revenue for AI cloud services could reach $2 trillion by 2030. Being the foremost player in cloud computing, Amazon stands to benefit significantly from this shift.

Amazon’s E-Commerce Leadership

Despite advancements by competitors, Amazon continues to dominate the e-commerce landscape, capturing approximately 40% of the U.S. e-commerce market, compared to rival Walmart‘s 7% share.

Furthermore, Amazon is enhancing its platform and delivery network, improving customer shopping experiences. In the fourth quarter of 2024, Amazon delivered over 65% more items to its Prime members on the same day or the following day compared to the previous year. The company also reported record-breaking sales during the previous Black Friday week and Cyber Monday.

Consequently, North American sales surged by 10% in the fourth quarter, reaching $115.6 billion, while operating income rose 43% to $9.3 billion.

E-commerce comprised roughly 16% of total retail sales in the U.S. last year, a figure projected to increase to 20% by 2028, according to eMarketer. Given Amazon’s dominant market position and anticipated e-commerce growth, the company remains well-positioned for future gains.

Growth in Advertising Sector

Additionally, Amazon’s advertising segment shows strong expansion, as ad sales climbed 18% in the fourth quarter, totaling $17.3 billion. This marks a significant increase from the $12.6 billion in annual ad sales reported in 2019.

Amazon is expected to capture around 15% of the digital advertising market this year, according to Statista. Ad revenue reached over $56 billion in 2024, with management forecasting an annual run rate of $69 billion for this year.

While advertising is not Amazon’s primary focus, it serves as an important contributor to the company’s increasing influence across emerging markets.

Considerations for Selling Amazon Stock

Currently, there seems to be little justification for selling Amazon Stock. Although financial imperatives can arise, such as purchasing a home or paying for education, the fundamentals of Amazon’s core e-commerce and cloud computing businesses remain strong.

With ongoing opportunities emerging in smaller sectors like advertising, Amazon’s status as a market leader supports the strategy of either buying more shares or retaining existing ones.

Even though Amazon’s stock is not the cheapest on the market—with a forward price-to-earnings ratio of 32.3 compared to the S&P 500’s 23.8—it remains relatively attractive given the company’s long-term growth potential.

A Potential Second Chance at Investment

If you ever feel you’ve missed out on successful stock investments, there may be an opportunity now.

On rare occasions, our team of experts issues a “Double Down” Stock recommendation for companies they believe are on the verge of significant gains. If you’re concerned about having missed your chance to invest, this could be the perfect time to act before it’s too late. Consider these past performance examples:

• Nvidia: If you invested $1,000 when we doubled down in 2009, you’d have $323,920!
• Apple: If you invested $1,000 when we doubled down in 2008, you’d have $45,851!
• Netflix: If you invested $1,000 when we doubled down in 2004, you’d have $528,808!

Currently, we are issuing “Double Down” alerts for three exciting companies, and opportunities like this are rare.

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*Stock Advisor returns as of February 28, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is on The Motley Fool’s board of directors. Chris Neiger holds no position in any of the mentioned stocks. The Motley Fool has positions in and recommends Amazon, Goldman Sachs Group, Microsoft, and Walmart. The Motley Fool also recommends options like long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. For further details, please refer to The Motley Fool’s disclosure policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.