Artificial intelligence stocks have driven the 2025 stock market boom. Wall Street bulls pushed the Nasdaq and S&P 500 to new all-time highs on Friday.
Stocks are trading at records as the third-quarter earnings season for AI, big tech, and the overall stock market enters a crucial phase.
See the Zacks Earnings Calendar to stay ahead of market-making news.
Five of the Mag 7 tech stocks—Alphabet, Amazon, Apple, Meta, and Microsoft—are set to report their Q3 earnings during the last week of October.
Today, we focus on Amazon stock, which earns a Zacks Rank #1 (Strong Buy), ahead of its Q3 earnings report on Thursday, October 30.
Investors might want to buy the Mag 7 stock and AI hyperscaler before a potential breakout.
Image Source: Zacks Investment Research
Amazon AMZN already operates the world’s largest cloud-computing business. AWS holds roughly 30% of the global cloud infrastructure market, surpassing Microsoft’s MSFT 20% and Alphabet’s 12%.
AWS has helped transform Amazon into an economic and technology giant. It also provides a strong foundation for rapid AI growth.
Amazon is among the few AI hyperscalers racing to shape the future of AI by building data centers everywhere to support the growth of large language models (LLMs) like ChatGPT and beyond. AI applications are still in their infancy overall. Many see a future where AI becomes far more advanced and integrated, transforming nearly every part of the economy.
Amazon is betting heavily on playing a major role in future AI developments, regardless of how applications evolve.
Image Source: Zacks Investment Research
The e-commerce leader, which controls 40% of the U.S. market, is also integrating AI into every part of its business to innovate, cut costs, and improve customer experiences.
Additionally, Amazon’s Prime business is expanding into streaming to better compete with Netflix and others. Its digital advertising segment is growing rapidly. The strength of its higher-margin AWS and ad segments, along with a focus on efficiency, is boosting Amazon’s earnings.
Post-COVID, Amazon has focused on profits amid higher interest rates. Last year, AMZN grew its GAAP earnings per share (EPS) by 91%. It’s projected to grow EPS by 24% in 2025 and 12% in FY26, reaching $7.67 per share, up from $2.90 in 2023.
Image Source: Zacks Investment Research
Amazon’s earnings outlook has improved since its Q2 report, with its most accurate estimates also well above consensus, earning it a Zacks Rank #1 (Strong Buy). It has beaten EPS estimates by an average of 23% over the past four quarters.
