Why Amazon’s Stock Is Stuck: Unlocking Its Potential

Have you ever wondered why a titan like Amazon, a company that seems to dominate every corner of our lives, from online shopping to cloud computing, can’t seem to get its stock moving? It’s a question that’s been nagging at investors for a while now. Despite its massive influence, Amazon’s stock has been treading water, barely budging while its tech peers soar to new heights. In my experience, when a stock like this stalls, there’s usually a single linchpin holding it back—and for Amazon, that linchpin might just be its cloud computing arm.

The Cloud Conundrum: Amazon’s Stock Stall Explained

Amazon isn’t just the place where you order your groceries or binge-watch your favorite shows—it’s a tech juggernaut with its hands in everything from e-commerce to artificial intelligence. Yet, its stock has been the odd one out among the so-called Magnificent Seven tech giants, barely inching up in 2025 while competitors like Alphabet and Microsoft have posted double-digit gains. So, what’s the deal? The answer lies in one critical piece of the puzzle: Amazon Web Services (AWS), the company’s high-margin cloud computing division.

AWS has long been Amazon’s golden goose, generating massive profits that fuel the company’s ambitious ventures. But lately, its growth has slowed, and investors are starting to notice. When you compare AWS’s performance to its rivals—Microsoft’s Azure and Google Cloud—it’s clear that Amazon’s cloud business is losing some of its edge. This slowdown is the biggest drag on Amazon’s stock, and until it picks up steam, the share price might stay stuck in neutral.

AWS: The Engine That Needs a Tune-Up

Let’s break it down. AWS is still the king of cloud computing, holding the top spot in market share. But its growth has been sluggish compared to its peers. In the second quarter of 2025, AWS revenue grew by 17.5% year-over-year—a solid number, sure, but it pales in comparison to Azure’s 39% surge and Google Cloud’s 32% leap. That’s not just a gap; it’s a chasm.

“The market leader can’t afford to coast. AWS needs to step on the gas, especially in the AI race, to keep investors excited.”

– Financial analyst

Why does this matter? Because AWS isn’t just another division—it’s the profit engine that powers Amazon’s bigger dreams. When its growth slows, investors start to question whether Amazon can keep up with the blistering pace of innovation in the tech world. And right now, the tech world is all about artificial intelligence (AI). The generative AI boom has put AWS in a tricky spot, as competitors like Azure are capitalizing on the demand for AI-driven cloud solutions.

Perhaps the most frustrating part is that Amazon isn’t standing still. They’ve made bold moves, like partnering with Anthropic, the company behind the Claude chatbot, to bolster their AI capabilities. But investors are an impatient bunch—they want results, and they want them now. Until AWS can show it’s back in the driver’s seat, Amazon’s stock might continue to languish.

The AI Race: Where Amazon Stands

If there’s one thing that’s clear, it’s that AI is the future of tech—and cloud computing is at the heart of it. Companies are pouring billions into building AI models, and they need massive computing power to do it. That’s where AWS comes in, or at least, where it should come in. But right now, Microsoft’s Azure is stealing the spotlight, thanks to its deep integration with AI tools and partnerships like the one with OpenAI.

Amazon’s response? Project Rainier, a massive AI supercomputer developed in collaboration with Anthropic. This beast of a machine is designed to handle the intense computational demands of generative AI, easing capacity constraints for Anthropic’s Claude chatbot and driving more revenue to AWS. Analysts are optimistic, with some predicting that this partnership could add significant growth to AWS in the coming years—potentially 7% to its revenue growth by 2026.

But here’s the rub: potential isn’t enough. Investors have been burned before by promises of “long-term growth” that take too long to materialize. For Amazon’s stock to break out of its rut, AWS needs to deliver tangible results—and soon. It’s not just about keeping up with Azure and Google Cloud; it’s about reclaiming the narrative that Amazon is the undisputed leader in cloud computing.

Beyond the Cloud: Other Factors at Play

While AWS is the main culprit behind Amazon’s stock woes, it’s not the only story. The company’s e-commerce business, while still a powerhouse, isn’t the growth driver it once was. Amazon has been working hard to streamline its operations—think faster delivery times and lower costs—but these efforts haven’t been enough to move the needle for investors. Why? Because the margins in e-commerce are razor-thin compared to the juicy profits from AWS.

Then there’s the grocery expansion, which has been a mixed bag. Amazon’s push into physical stores and grocery delivery is exciting, but it’s a capital-intensive venture that takes time to pay off. In my opinion, these moves are smart for the long haul, but they’re not the kind of thing that gets Wall Street buzzing. Investors want big, bold wins, and right now, AWS is the best shot at delivering one.

• E-commerce efficiency: Amazon is cutting costs and speeding up deliveries, but the impact on stock price is limited.
• Grocery ambitions: Expanding into physical stores is promising but won’t move the needle in the short term.
• AI innovation: Partnerships like Anthropic are a step in the right direction, but results are still pending.

What Analysts Are Saying

Despite the challenges, not everyone is bearish on Amazon. Some analysts see a light at the end of the tunnel, particularly when it comes to AWS. One major financial institution recently upgraded Amazon’s stock, citing the potential for AWS to reaccelerate its growth. They even slapped a price target of $280 on the stock—implying a hefty 27% upside from its current price of around $220.

“AWS reacceleration is the key to reversing Amazon’s stock underperformance.”

– Investment analyst

This optimism isn’t just blind hope. It’s rooted in Amazon’s ability to innovate and adapt. Project Rainier, for example, could be a game-changer, allowing AWS to handle more AI workloads and compete more effectively with Azure and Google Cloud. But as any seasoned investor knows, execution is everything. Amazon needs to prove it can deliver on these ambitious plans.

The Investor’s Dilemma: Buy, Hold, or Sell?

So, where does this leave investors? Amazon’s stock is a tough call right now. On one hand, the company is a behemoth with unmatched scale and a knack for reinventing itself. On the other hand, its stock is stuck, and the path to unlocking its potential hinges on AWS getting its mojo back. For those with a long-term view, Amazon remains a compelling bet, especially if Project Rainier and the Anthropic partnership deliver as promised.

Personally, I think the market is underestimating Amazon’s ability to bounce back. The company has a history of defying skeptics, and its investments in AI could pay off big time. But patience is key—something not all investors have in spades. If you’re considering jumping in, here’s a quick breakdown of the pros and cons:

For now, many analysts maintain a buy rating on Amazon, with price targets ranging from $250 to $280. But the real question is whether you believe in Amazon’s ability to execute. If AWS can regain its dominance and capitalize on the AI boom, the stock could finally break free from its slumber.

Looking Ahead: Can Amazon Turn It Around?

Amazon’s stock may be stuck, but it’s far from broken. The company’s challenges are real—AWS’s slowing growth, fierce competition in AI, and the slow payoff from ventures like grocery expansion. But Amazon has a track record of turning challenges into opportunities. The question isn’t whether Amazon can innovate—it’s whether it can do so fast enough to satisfy Wall Street’s demands.

In my view, the partnership with Anthropic and the development of Project Rainier are reasons to be cautiously optimistic. These moves show that Amazon is serious about reclaiming its edge in the cloud computing space. But the clock is ticking, and investors are watching closely. If AWS can deliver the kind of growth that made it a market leader in the first place, Amazon’s stock could be in for a serious breakout.

So, what’s the one key to unlocking Amazon’s stock? It’s simple: AWS needs to accelerate. Until that happens, the stock might remain a frustrating hold for investors. But for those willing to bet on Amazon’s long-term vision, the rewards could be worth the wait. What do you think—will Amazon rise to the challenge, or will it continue to lag behind its tech peers?

Amazon's Growth Formula:
  50% AWS Acceleration
  30% AI Innovation
  20% Operational Efficiency