Amazon.com (AMZN): Analyst Optimism Strengthened by Cloud and AI Growth

AI Stocks Making Moves This Week

Recently, we unveiled a list of 10 AI stocks that are making notable moves this week. In this article, we will explore how Amazon.com, Inc. (NASDAQ:AMZN) compares against other AI stocks that are currently trending in the market.

The AI Arms Race: A Global Perspective

Is China on the verge of overtaking the United States in the AI arms race? While many experts believe that it still has a way to go, executives from leading artificial intelligence firms assert that China needs to upgrade its infrastructure and enhance its exports to maintain a competitive edge.

Congressional Insights on AI Development

During a recent hearing held by the U.S. Senate, leaders from major American AI companies emphasized the need for Washington to bolster its infrastructure and promote the export of AI chips to retain dominance over China. Despite the U.S. currently being ahead in the AI race, the hearing highlighted the challenges and necessities for continued leadership.

Addressing Regulatory Barriers

The U.S. Senate Commerce Committee, led by Republican Senator Ted Cruz, is focused on lowering regulatory hurdles surrounding artificial intelligence. The push for reform has gained momentum, especially as China showcases its significant advancements in AI technologies, including affordable and efficient AI models from DeepSeek and advanced chips developed by Huawei.

Policy Adjustments to Enhance AI Competitiveness

The American tech industry is leveraging these geopolitical concerns to persuade the current administration to adopt favorable policies, such as easing restrictions on AI chip exports. The strategic positioning of AI companies is crucial to maintaining the competitive landscape between the U.S. and China.

The Importance of Technological Adoption

“The number-one factor that will define whether the U.S. or China wins this race is whose technology is most broadly adopted in the rest of the world. The lesson from Huawei and 5G is that whoever gets there first will be difficult to supplant.”

Perspectives from Industry Leaders

Sam Altman, the CEO of OpenAI, also provided testimony at the Senate hearing, emphasizing that the societal advancements stemming from AI will likely accelerate over the next few years due to U.S. innovation. He insisted that investing in infrastructure is essential to ensure these advancements can be supported.

Infrastructure Challenges and Innovations

In prior written remarks reviewed by Reuters, AI leaders urged lawmakers to simplify federal permitting processes related to the energy needs of AI and to promote the creation of more government data sets that can be utilized for AI training purposes. The current infrastructure in the U.S. is facing challenges due to its age and inability to keep pace with growing energy demands.

“America’s advanced economy relies on 50-year-old infrastructure that cannot meet the increasing electricity demands driven by AI, reshoring manufacturing, and increased electrification.”

Selecting Prominent AI Stocks

For this analysis, we carefully selected AI stocks by reviewing news articles, stock analyses, and press releases. These stocks are notably favored among hedge funds, with data reflecting their popularity as of Q4 2024.

Understanding Hedge Fund Interests

Why do we pay attention to stocks that attract significant hedge fund investments? The reasoning is straightforward: research suggests that mimicking the top stock picks of successful hedge funds can yield better market performance. Our quarterly newsletter employs a strategy that selects 14 small-cap and large-cap stocks each quarter, boasting a remarkable return of 373.4% since May 2014, outperforming its benchmarks by an impressive 218 percentage points.

Amazon.com, Inc. as a Leading AI Stock

Amazon.com, Inc. (NASDAQ:AMZN) represents an American technology giant delving into e-commerce, cloud computing, digital streaming, and artificial intelligence solutions. Recently, Wedbush reaffirmed Amazon, along with other major players like Alphabet and Microsoft, as “Outperform,” indicating their strong positioning in the market.

Wall Street’s Consensus

“The stalwart cloud/hyper scale players have been another instrumental part of this first key phase of the AI Revolution being led by Microsoft and now also seeing Google (GCP) and Amazon (AWS) finding major cloud and AI momentum.”

Currently, Wall Street analysts maintain a consensus “Buy” rating for AMZN stock. The average price target rests at $236, indicating a potential upside of 22%. Notably, the highest target reaches $290, suggesting an impressive upside of 50%.

Conclusion: Evaluating AMZN Among AI Stocks

In summary, AMZN is ranked first among the AI stocks making significant moves this week. While we acknowledge the investment potential of AMZN, we believe certain other AI stocks could offer even greater returns in a shorter timeframe. For instance, there’s an AI stock that has seen an upward trajectory since the beginning of 2025, while popular AI stocks have struggled, losing about 25%. If you’re in search of a promising AI investment trading at less than five times its earnings, we invite you to explore our report on the most affordable AI stock.

Further Reading on AI Investments

For those interested in diversifying their AI portfolios, consider checking out our analysis on the “20 Best AI Stocks To Buy Now” and “30 Best Stocks to Buy Now According to Billionaires.”

Disclosure

This article has been originally published at Insider Monkey.