This Tech Giant Could Skyrocket on Its $100 Billion AI Bet in 2025
Amazon will keep playing a critical role in AI technology and cloud computing.
Amazon (NASDAQ: AMZN) demonstrated remarkable financial strength in the fourth quarter, with revenues and earnings beating analysts' consensus expectations. Revenues were up 10.5% year over year to $187.8 billion, ahead of the Wall Street target of $187.3 billion. Adjusted earnings per share rose by 86% to $1.86, dramatically higher than the consensus estimate of $1.49.
Despite the robust performance, the market's initial reaction to the Q4 report it delivered on Feb. 6 was negative. Investors were disappointed with management's weaker-than-expected revenue guidance for the first quarter of 2025. While analysts had been forecasting first-quarter revenues of $158.33 billion, management guided for a range of $151 billion to $155.5 billion. Additionally, the company's share price was impacted by the turbulence in the overall technology sector that was triggered by the release of Chinese start-up DeepSeek's new AI model, which has capabilities similar to OpenAI's GPT-4, but which reportedly was developed and trained at a fraction of the price of other large language models.
Although Amazon's growth outlook was a little unnerving, its multifaceted artificial intelligence (AI) strategy, which combines custom chip development and cutting-edge AI applications supported by a top-notch cloud computing platform, cannot be ignored. Here's why Amazon looks poised to head higher in 2025.
