Amazon’s stock has surged significantly, now trading at $224.83, representing an extraordinary increase of over 230,258.61% since its IPO in May 1997. As the company navigates recent labor strikes and safety allegations, Amazon’s revenue and profits demonstrate resilience and growth.
Amazon’s stock surges amid labor strikes and safety concerns
In a critical period for Amazon, workers across seven U.S. facilities organized the largest strike in the company’s history, led by the Teamsters union. This coordinated action includes walkouts in Staten Island, Atlanta, Skokie, San Francisco, and parts of Southern California. The strikes highlight ongoing labor tensions, as Amazon reportedly claims it can manage operations despite disruptions. The situation remains fluid, with impacts from these actions still under scrutiny.
Recent news also reported an incident in Massachusetts where an Amazon delivery driver abandoned around 80 packages. The driver cited overwhelming stress as the reason for this act, underscoring the mental burden some employees experience. The Teamsters union has intensified pressure on the company, aiming for improved labor conditions.
Amazon has also been addressing safety concerns. In December, the company reached a settlement with the Occupational Safety and Health Administration (OSHA) over allegations of unsafe working conditions at multiple facilities. As part of the agreement, Amazon accepted a $145,000 penalty but avoided deeper penalties on nine other citations regarding ergonomic hazards and inadequate medical treatment.
Simultaneously, Amazon’s financial performance remains robust. In November 2024, the company announced third-quarter revenue of $620.13 billion and a notably high stock price, propelling shares close to their 52-week high of $231.20. Analysts at Bernstein and Mizuho expressed bullish sentiments, with Mizuho raising its price target for Amazon shares from $240 to $260.
Amazon has experienced remarkable performance in recent years. From 2014 to 2023, the company’s revenue grew approximately 540%, and net income surged to $30.42 billion in 2023 after fluctuating in prior years. The e-commerce giant also capitalized on strong demand during the COVID-19 pandemic, although it later faced challenges due to a pullback in consumer spending in 2022.
Key revenue drivers shaping Amazon’s future
Three primary areas are likely to influence Amazon’s stock performance moving forward: e-commerce, Amazon Web Services (AWS), and advertising. E-commerce remains critical despite the competitive landscape. Though online retail only accounts for about 15% of total retail sales, the growth trajectory may face headwinds as competitors bolster their online presence.
AWS continues to be a significant growth driver, with $25.04 billion in revenue reported in Q1 2024. However, AWS’s 13% year-over-year growth is slower compared to competitors like Microsoft and Google, raising concerns about market share retention. Investments in artificial intelligence could enhance AWS’s offerings, but sustaining momentum is crucial amidst increasing competition.
Amazon’s advertising business has emerged as a high-margin segment, ending 2023 with $47 billion in revenue and registering a growth rate of 24%. Analysts project continued growth in advertising revenue, with demand for streaming ad impressions expected to rise.
Looking ahead, analysts predict a consensus price target for Amazon stock at $220.00 for the coming year, indicating slight potential downside from the current trading price. Meanwhile, the 24/7 Wall Street forecast estimates the stock price could reach $225 in the next 12 months, buoyed by AWS’s performance and the advertising segment.
Moreover, projections suggest Amazon’s stock may hit $287 by 2025, representing a 27.65% increase. The company’s growth trajectory is anticipated to maintain momentum, with an estimated revenue growth rate exceeding 10% and EPS climbing to $5.74.
Continuing through the following years, Amazon’s stock is expected to reflect an earnings multiple adjustment while navigating the competitive landscape. By 2030, analysts project Amazon’s revenue could reach $1.15 trillion with a net income of approximately $131 billion, leading to an estimated stock price of $370.
The very size that fuels Amazon’s resilience also makes it vulnerable to its own inertia. Slower AWS growth compared to rivals like Microsoft and Google signals the need for sharper execution in cloud and AI innovation. And while the advertising business is booming, it exists in an increasingly crowded space, where even a market leader can feel the squeeze. For investors, the story isn’t about blind faith in past performance—it’s about recognizing Amazon as a juggernaut that must navigate its own complexities. The opportunity is undeniable, but so are the risks, and both demand a discerning eye.
Disclaimer: The content of this article is for informational purposes only and should not be construed as investment advice. We do not endorse any specific investment strategies or make recommendations regarding the purchase or sale of any securities.
Featured image credit: Amazon
