We recently published a list of the 13 NASDAQ Stocks with the Highest Upside Potential. In this article, we are going to take a look at where Amazon.com Inc. (NASDAQ:AMZN) stands against other NASDAQ stocks with high upside potential.
On April 7, Dan Ives of Wedbush Securities joined CNBC’s ‘Squawk on the Street’ to discuss how the current tariff environment could impact tech supply chains. Musk’s actions and Trump’s tariffs have contributed to broad economic uncertainty, which Ives also referred to as the economic Armageddon for US tech in an earlier conversation. He expressed concern about the structural supply chain challenges posed by recent tariffs and geopolitical tensions. Ives highlighted that the US tech sector has historically maintained an edge over China but this could be wiped out if manufacturing were relocated to the US. The logistical hurdles of building manufacturing plants in the US are not negligible and it would take 4 to 5 years to establish facilities capable of sustaining production levels comparable to those in Asia.
He also acknowledged that he hasn’t downgraded major stocks like the ones in MAG7 but remains cautious. If these previously highlighted issues persist for months, Ives anticipates drastic cuts in earnings. This uncertainty surrounding tariffs could lead to lower demand for emerging technologies like AI and cybersecurity. He explained that this situation could severely impact the US tech companies and lead to broader cuts across the tech sector — potentially up to 25% in earnings. He also criticized Elon Musk’s political involvement, which he believes has caused permanent damage to his brand and customer base. He estimated a 20% demand destruction in Europe and 10% in the US.
Our Methodology
We used the Finviz stock screener to select the 13 stocks with the highest analysts’ upside potential (at least 35%) as of April 8. The stocks are ranked in ascending order of their upside potential. We have also added the hedge fund sentiment for each stock, as of Q4 2024, which was sourced from Insider Monkey’s database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A customer entering an internet retail store, illustrating the convenience of online shopping.
Amazon.com Inc. (NASDAQ:AMZN)
Average Upside Potential as of April 8: 54.06%
Number of Hedge Fund Holders: 339
Amazon.com Inc. (NASDAQ:AMZN) provides consumer products, advertising, and subscription services through online and physical stores internationally. It has 3 segments called North America, International, and Amazon Web Services (AWS). Its products are offered through its stores and include merchandise and content purchased for resale, and products offered by third-party sellers.
The company’s AWS segment revenue improved by 19% year-over-year in Q4 2024, as more and more customers are moving to the cloud to use AI. The company’s AI chips under the name of Tranium 2 are 30% to 40% cheaper than competitors, which helps Amazon.com Inc. (NASDAQ:AMZN) attract big clients like Anthropic, which is an AI safety and research company. Amazon Q, which is an AI assistant, is saving companies time and money and showcases practical AI use.
AWS is heavily investing in data centers for AI and expects similar spending in 2025. On April 4, TD Cowen analyst John Blackledge lowered the price target on the company from $265 to $240 while keeping a Buy rating. This target was a result of current macro concerns and weak consumer sentiment overall. However, Blackledge believes that the stock’s valuation is appealing at its current levels and the company will report strong FQ1 2025 results, mostly fueled by AWS. Earlier in February, Blackledge had forecast AWS’s GenAI revenue to grow from $7.1 billion in 2025 to $56.3 billion in 2030.
Nightview Capital is bullish on the company due to its AI-powered efficiency gains in retail and stated the following regarding Amazon.com Inc. (NASDAQ:AMZN) in its Q4 2024 investor letter:
“Artificial intelligence is no longer just a promise—it’s becoming the defining force of the modern economy. From self-driving vehicles to humanoid robotics, intelligent systems are not only enhancing efficiency but unlocking entirely new markets. These systems process and learn from vast amounts of real-world data, iterating and improving at a scale no human could achieve.
In our view, this isn’t just innovation; it’s exponential evolution. Companies leading the AI revolution are building formidable data moats, making it nearly impossible for latecomers to compete. Every mile driven by an autonomous vehicle, every task completed by an industrial robot—these actions feed a cycle of continuous improvement.
Amazon.com, Inc. (NASDAQ:AMZN): Core Opportunity: Amazon’s growth is anchored by three high-potential areas: retail margin expansion, a rapidly growing advertising business, and the continued growth and need for Amazon Web Services (AWS). Together, these pillars position Amazon for the next leg of growth and profitability.
Competitive Advantage: Retail Margin Expansion: With e-commerce still accounting for only 16% of retail sales in the United States (per the U.S. Census Bureau)—and even less globally—Amazon has significant room for growth. CEO Andy Jassy’s emphasis on AI-driven efficiencies, such as a possible 25% reduction in cost-to-serve, underscores the company’s ability to unlock new profitability in their now three-decade-old core business. More than a decade after the Kiva robotics acquisition, we see the potential for the next wave of automation to reduce variable cost per unit (VCPU) on the “pick and pack” and transportation side of the business as the decade progresses. Overall, we see EBIT margins expanding steadily throughout the next several years…” (Click here to read the full text)
Overall, AMZN ranks 6th on our list of NASDAQ stocks with the highest upside potential. While we acknowledge the growth potential of AMZN, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.