While Amazon’s (NASDAQ:AMZN) stock is far from flying under the radar, it hasn’t been grabbing as many headlines recently compared to some of its peers. Despite this, the company has seen significant growth potential, including in AI, which is not yet fully reflected in its stock price.

Over the past year, Amazon’s stock has surged by 77%, indicating that the market is recognizing its improving prospects. However, there are still opportunities for investors to capitalize on its potential, as I’ll explain below.

AI: A Tailwind for AMZN Stock

While other companies among the “Magnificent Seven” have been in the spotlight for their AI advancements, Amazon has been making significant strides in this area as well.

In February, Amazon reported quarterly earnings that exceeded expectations, with strong revenue and earnings for the December quarter. CEO Andy Jassy also highlighted the company’s efforts to integrate generative AI technology into its AWS cloud computing platform, which has been well-received.

Despite concerns that the rise of generative AI could pose challenges for AWS and AMZN stock, management is optimistic about its potential to generate “tens of billions” in additional revenue for the company in the future.

Additionally, Amazon continues to develop and roll out AI tools and features to enhance its e-commerce platform, as well as to improve the performance of its digital advertising business, which has been growing rapidly.

Non-AI Catalysts in Play

In addition to AI, Amazon has other major catalysts driving its growth. One recent development is its partnership with Eli Lilly to support the pharma giant’s direct-to-consumer sales of its products, including the popular weight loss drug Zepbound. While this partnership alone may not significantly impact AMZN, success in this endeavor could lead to more partnerships in the pharmaceutical industry.

Furthermore, Amazon’s efficiency efforts from last year are expected to continue boosting its bottom line in the coming quarters, adding to its growth potential.

Bottom Line: A Strong Buy

Analysts expect Amazon’s earnings to grow by around 43.5% this year and an additional 29.5% in 2025. Continued progress in AI, along with other growth drivers, could further boost confidence in the company’s earnings growth trajectory.

In conclusion, Amazon’s stock remains a strong buy for investors, with its potential for disruption in multiple industries and its reputation as a top blue-chip stock.

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