New Trade for March 27th, 2025

Amazon (AMZN) – A Buffett-Backed Stock with Big Upside

Warren Buffett is known for his ability to spot value before the market fully appreciates it. While he typically gets in early, Amazon (NASDAQ: AMZN) was one that he admittedly missed at first. In 2018, he openly regretted not buying sooner. By 2019, Berkshire Hathaway took a position, and since then, Amazon’s stock has surged 150%—yet it still has significant upside ahead.

Why Amazon Still Has More Room to Run

1. A Long Track Record of Growth

Amazon has consistently delivered strong earnings growth, powered by its e-commerce dominance and cloud computing leadership. Despite its size, it continues to innovate, expand, and drive higher revenues across multiple sectors.

2. Artificial Intelligence: A New Growth Driver

Amazon has made a massive push into AI, which is now driving growth across both its retail and cloud businesses:

  • AI-powered logistics: Optimizing delivery routes and warehouse operations, improving efficiency, and lowering costs.
  • AI-driven shopping experiences: The introduction of Rufus, an AI-powered shopping assistant, keeps customers engaged and boosts sales.
  • Amazon Web Services (AWS) AI offerings: AWS provides AI tools, infrastructure, and custom-built AI chips to businesses, a market expected to reach $1 trillion by 2030.

3. AWS: The Underrated Cash Machine

Amazon Web Services (AWS) remains one of the most profitable segments of the company. With a $115 billion revenue run rate, AWS fuels Amazon’s long-term growth and funds further innovation. As demand for AI computing power explodes, AWS is positioned to capture a major share of this booming industry.

4. A Reasonable Valuation for Long-Term Investors

Despite its growth potential, Amazon is not overvalued by historical standards. The stock currently trades at 35x forward earnings estimates, a reasonable multiple given its track record and future potential.

Final Takeaway

Buffett may have gotten into Amazon late, but that didn’t stop the stock from delivering strong returns for Berkshire Hathaway. With AI, cloud computing, and e-commerce still expanding, Amazon has the potential to go parabolic in 2025 and beyond.

Investors looking for long-term growth backed by strong fundamentals should keep Amazon on their radar.


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