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Amazon (AMZN) stock rose to record highs in the days following Donald Trump’s election as the 47th U.S. president. AMZN is currently the fourth biggest U.S. company in terms of market cap, trailing only Apple (AAPL), Nvidia (NVDA), and Microsoft (MSFT). In this article, we’ll discuss what Trump’s return to the White House means for Amazon, and whether the company can join the league of $3 trillion companies under his presidency.
To begin with, Trump has proposed many policies, some of which are music to corporate America’s ears – the tax cuts, for instance. Then there is the somewhat controversial Department of Government Efficiency (DOGE), which is tasked with advising the president on cutting “wasteful spending.” It also has the mandate to advise Trump on ways to "slash excess regulations.”
Trump’s proposed tariffs are perhaps the most divisive, and while some industries like steel would cheer any such move, most economists see them as inflationary. Given Amazon’s diversified operations, it would be impacted by most, if not all, of Trump’s economic policies.
Trump’s Policies Could Be a Net Positive for Amazon
Trump’s proposed extension and expansion of 2017 tax cuts could boost consumption and particularly spur discretionary spending, which is one segment of the economy that has sagged. Amazon’s U.S. e-commerce operations stand to benefit from the tax cuts, as its growth could revive somewhat after the tax cuts.
Trump’s stance on artificial intelligence (AI) regulation could also impact Amazon, which is not only integrating AI across different business segments, but is also invested in AI startup Anthropic. Amazon recently announced a $4 billion investment in Anthropic, which brought its total investment to $8 billion. While we still don’t know much about what AI policies Trump might announce, the president might emphasize safety, given his key advisor Elon Musk’s long-held view on safe AI development.
However, Trump has usually stood for fewer regulations, and even though he is not a fan of Google, he is against breaking up Alphabet (GOOG). Like its fellow Big Tech peers, even Amazon is facing regulatory heat, and might expect some relief under a Trump presidency.
Trump’s tariffs, meanwhile, could be a headwind for retailers and e-commerce platforms, as many of the goods that they sell are sourced from China. However, this would be more of an industry-wide phenomenon, impacting not only Amazon but brick-and-mortar retailers like Walmart (WMT) as well.
Earlier this month, Amazon launched its low-cost platform named Haul, which is expected to take on Temu and Shein, which have scaled up significantly in the U.S. with the dirt-cheap products that they offer. It remains to be seen how any further tariffs on China could impact Amazon’s ambitions, as while it hasn’t explicitly said so, the prices available on Haul seem to suggest that most of them are being offered by sellers in China.
Overall, while Trump’s policies could be a mixed bag for Amazon, they look like a net positive.
AMZN Stock Forecast
Sell-side analysts have been turning incrementally bullish on Amazon since its Q3 earnings, and many brokerages have raised their target prices. Earlier this week, Redburn Atlantic raised Amazon’s target price by $10 to $235, as the brokerage believes AI will help drive business for Amazon’s enterprise-focused Amazon Web Services (AWS).
Amazon has a consensus rating of “Strong Buy” from the 49 analysts covering the stock, and its mean target price of $236.75 is almost 14% higher than yesterday’s closing prices. AMZN’s Street-high target price of $285 is 37% higher, and if the stock reaches those levels, its market cap will hit almost $3 trillion.
Is AMZN Stock Still a Buy?
Amazon shares are up nearly 37% for the year, and are outperforming the S&P 500 Index ($SPX). The company still has several growth drivers for 2025 and beyond, and I believe it has room to run much higher over the long term.
The pivot to e-commerce from physical retail is expected to continue, which is a tailwind for Amazon, and the recently launched Haul platform should help the company increase its target market even further. Amazon’s digital advertising business also has a decent growth runway as it ramps up ads on Prime. Launching an ad-supported tier coupled with a password sharing crackdown did wonders for Netflix (NFLX), incidentally.
Amazon’s AI business is still in its early days, and has the potential to be an “AWS-like opportunity” for the company. Amazon's business-to-business (B2B) platform, Amazon Business, is another potential growth driver to watch, and it is already running at a multi-billion-dollar gross revenue run rate.
Moreover, Amazon remains a margin expansion story, which should keep the bottom line buoyed. Given the expected growth in its top line and bottom line over the coming years, I would bet on Amazon joining the $3 trillion league over the next couple of years.
