Heavy investment fails to yield stock price advantages, Amazon shareholders urgently need to see the results of AI investments

Currently, the significant investments by technology companies in the field of artificial intelligence have mostly yielded returns in the stock market. However, for Amazon (AMZN.US), this is not the case.

According to Zhitong Finance APP, despite Amazon's substantial investment in artificial intelligence (which the company views as a way to achieve greater efficiency and faster sales growth), its stock price has only risen about 3% this year, lagging behind the S&P 500 index's 7% increase. In contrast, companies like Meta Platforms (META.US), which are relentlessly pursuing dominance in the field of artificial intelligence, have seen their stock prices rise by over 20%.

Janus Henderson portfolio manager Brian Recht stated, "The stock's performance in artificial intelligence has not received much recognition. Investors are eager to see whether Amazon can effectively leverage artificial intelligence to enhance profitability, but we believe that evidence of the benefits brought by artificial intelligence will become clearer in this quarter."

After a sell-off earlier this year due to concerns over the surge in advanced artificial intelligence models developed by Chinese companies at lower costs, artificial intelligence has once again become a key factor in distinguishing winners from losers in the stock market. The top three companies in the S&P 500 index by growth in 2025 are expected to be Meta, Microsoft (MSFT.US), and Nvidia (NVDA.US), while companies like Apple (AAPL.US), which are facing challenges in the field of artificial intelligence, have seen their stock prices decline.

Although Amazon has numerous different business sectors, including cloud computing and advertising, its e-commerce business (which accounts for the majority of total sales) is under pressure from tariffs.

Most of the focus regarding the impact of artificial intelligence is on Amazon's cloud business unit, AWS. With the acceleration of artificial intelligence applications, this service is expected to benefit from increased customer demand. However, Recht believes that the impact on Amazon's retail division could be equally significant.

Artificial intelligence is touted as a more effective means to help Amazon deliver targeted advertisements and products to consumers and enhance the operational efficiency of its logistics network and warehouses. The company has also been promoting its Rufus chatbot to assist shoppers in filtering products, viewing reviews, and comparing prices.

According to analysts' forecast data, Amazon is expected to report earnings per share of $1.32 and revenue of $162 billion when it announces its second-quarter financial results on July 31, representing year-over-year growth of 4% and 9%, respectively. In contrast, the average earnings growth for the seven major tech giants in the U.S. is expected to be 15%, with revenue growth projected at 12%.

Data shows that Amazon plans to invest $104 billion in capital expenditures this year, the highest amount among S&P 500 constituent companies to date. ** In addition to computing power infrastructure, this funding also includes warehouse construction and other expenses related to the company's logistics network. In June of this year, the company announced it would invest at least $30 billion in data center projects in Pennsylvania and North Carolina.

Last week, Amazon announced layoffs in its cloud computing division, citing the need to invest and "optimize resources." Amazon CEO Andy Jassy has stated that as the company hands over more tasks to artificial intelligence, the number of employees will decrease in the coming years.

Robotics is another area that excites Amazon investors, as the technology is expected to improve efficiency in logistics and warehouse operations. According to media reports last month, the company is designing an indoor obstacle course for training humanoid robots, which is part of its automated package delivery plan.

According to estimates from Bank of America, applying robotics technology to delivery operations could save Amazon over $7 billion annually by 2032. Analysts at Morgan Stanley wrote in a report last month that these efficiency gains suggest that Amazon's retail business may be "the largest underappreciated beneficiary of generative AI in the tech sector."

Irene Tunkel, chief U.S. equity strategist at BCA Research, stated: "The profit margins in retail are very low, so Amazon needs to maximize production efficiency as much as possible, and applying AI and robotics in warehouses has huge application scenarios. This will gradually show results over the next five or ten years, but Amazon is at the forefront of this field, which undoubtedly gives them an advantage."