Bill Ackman is making waves again—his Pershing Square Capital Management just made a bold bet on Amazon (AMZN), snapping up nearly $1 billion in stock during Q1 2025. The blockbuster move comes at a time when Amazon is under pressure from tariffs, slowing AWS growth, and fierce AI competition—issues that have dragged the stock down year-to-date. Ackman’s aggressive play has reignited debate on whether now is the moment to buy into Big Tech’s most embattled giant.
Amazon (AMZN) stock price history year-to-date
Despite macroeconomic headwinds and competition, Ackman sees a resilient AWS, underestimated retail strength gains, and temporary market overreactions as compelling reasons to “stock up” on AMZN, and I happen to agree.
Amazon Web Services (AWS) saw its growth accelerate in the first quarter of 2025, posting $25 billion in revenue, a 17% year-over-year increase. Profitability surged as well, with operating income nearly doubling from $5.1 billion in Q1 2024 to $9.4 billion. As AWS scales, it continues to benefit from powerful tailwinds in the cloud computing industry, which is projected to grow at a 20.4% CAGR and surpass $1 trillion in the coming years.
Competing with giants like Microsoft Azure and Google Cloud Platform (GCP), AWS is doubling down on AI to fuel further demand. Amazon’s heavy investment in generative AI, through initiatives like its Bedrock platform and custom-built chips such as Trainium, is positioning AWS as a leader in this next phase of cloud innovation.
Now accounting for roughly 17% of Amazon’s total net sales, AWS has become a growth engine so significant that it could stand alone as a major tech company.
Amazon (AMZN) Revenue by Segment
Amazon’s core retail segment continues to demonstrate strong momentum, with domestic revenue rising 12% year-over-year to $86.3 billion. International markets also contributed positively to the segment’s growth. Importantly, Amazon has transformed this historically lower-margin business into a significantly more profitable one, reporting $5 billion in operating income for the quarter—a notable achievement given the inherent challenges of retail operations.
This profitability reflects years of strategic investment in its fulfillment infrastructure, which has been refined to deliver faster shipping and reduce transportation costs. Despite persistent macroeconomic pressures and evolving consumer behavior, Amazon’s first-quarter retail performance underscores the resilience of both its business model and customer demand.
Amazon (AMZN) revenue, earnings and profit margin history
While the retail segment faces increased competition from players like Walmart and Temu, Amazon continues to lead the U.S. e-commerce market with a commanding 37.6% share, well ahead of Walmart’s 6.4% in second place. Additionally, Amazon’s advertising business—largely integrated within its retail ecosystem—is growing at an impressive 24% year-over-year and remains a key driver of overall profitability.
Given Amazon’s strong positioning across retail, cloud computing, and AI, it’s easy to see why investors like Bill Ackman have taken an interest. The company offers exposure to a diversified array of high-growth sectors. Notably, Amazon’s valuation appears reasonable by historical standards, with a current price-to-earnings ratio of 32.8, compared to its typical range of 40 to 80 in recent years.
On Wall Street, Amazon has a Strong Buy consensus rating based on 47 Buy, one Hold, and zero Sell ratings in the past three months. AMZN’s average price target of $240.62 implies almost 17% upside potential in the next twelve months.
DBS analyst Nashrullah Putra Sulaeman has a Buy rating on AMZN. He noted that Amazon’s performance, particularly in its cloud segment, was impressive despite a decline in free cash flow due to increased capital expenditure. He also pointed out that “Amazon’s retail segment is on a recovery path, showing sustained profitability and improved operating margins.”
Likewise, analyst Brent Thill of Jefferies maintains a Buy rating on AMZN with a price target of $240. He noted that a 6% acceleration in AWS backlog “indicates a strong demand for AWS services, coupled with record operating margins of 39.5%, showcasing Amazon’s ability to manage capacity constraints effectively.” Despite tariffs threatening its retail segment, the analyst believes the retail giant is better suited to handle macroeconomic headwinds than its competitors.
In summary, Amazon continues to demonstrate strong performance across its key business segments. Its leadership in e-commerce provides a buffer against broader economic challenges, while accelerating growth in AWS underscores the company’s successful diversification into high-margin, scalable markets. Strategic investments in AI further enhance its competitive positioning and open doors to new verticals.
That said, investors should remain mindful of the risks. Cloud computing, digital advertising, and e-commerce are all intensely competitive industries, and Amazon’s future success will hinge on its ability to maintain leadership in AWS while driving greater efficiency and sustainable profitability in its retail operations.
Despite its operational momentum, Amazon’s stock has lagged this year—an underperformance that has drawn attention from high-profile investors like Bill Ackman. With strong institutional support, reflected in Wall Street’s “Strong Buy” consensus rating, and exposure to several high-growth sectors, Amazon remains a compelling long-term opportunity for investors.
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