Amazon (AMZN) is one of the world’s largest online retailers and a hyperscaler thanks to its Amazon Web Services. The key driver for the stock has become artificial intelligence.
The stock is up about 16.31% year to date, at the time of writing, Friday morning, May 22, according to Yahoo Finance. Meanwhile, the SPDR S&P 500 index (SPY) is up about 8.92% in the same period.
AI is also driving a change in e-commerce.
Google unveiled Universal Cart at its I/O conference.
OpenAI launched Instant Checkout in September 2025.
Walmart launched Sparky in June 2025. Some investors have seen these announcements as a threat to Amazon’s retail.
Amazon has launched its response to these new trends, and Bank of America reacted with an updated, increasingly bullish forecast.
Recent key news for the stock
- The company reported strong Q1 earnings.
- Amazon invested in OpenAI.
- Amazon invested in Anthropic.
Let’s first take a look at what Amazon unveiled.
Rahul Chakraborty/Unsplash
Amazon launches Alexa for Shopping
Amazon unveiled Alexa for Shopping (AfS) on May 13. It is best described as a merger of Rufus and Alexa+.
Rufus was launched in February 2024 and is an AI shopping assistant trained on Amazon’s product catalog, customer reviews, community Q&As, and information from across the web.
The company said that over 300 million customers have used Rufus in 2025. Amazon reported in November 2025 that customers who use Rufus during shopping are 60% more likely to complete a purchase.
AfS combines Rufus’ product expertise and Amazon shopping history with the personalized knowledge and context of Alexa+.
It works across a wide range of surfaces and devices, including the Amazon Shopping app, website, and Echo Show, enabling customers to browse and shop the full Amazon store using voice, touch, or both.
“Alexa for Shopping is like having an expert personal shopper who already knows you and remembers your preferences, your past purchases, and your conversations, and carries that knowledge and understanding of you across your phone, laptop, and Echo devices,” stated Rajiv Mehta, vice president of Conversational Shopping at Amazon in the press release.
Investors will see AfS’s scheduled purchases as a key feature, as they have significant potential to drive Gross Merchandise Value (GMV) higher.
Bank of America says Alexa for Shopping will lead to Amazon’s push into the Agentic Era
In a research note shared with me, Bank of America analyst Justin Post and his team updated their opinion on Amazon stock, following the launch of AfS.
Post wrote, “As usage increases, AfS should benefit from a flywheel effect in which better personalization drives higher conversion and incremental engagement.”
The team believes this will drive higher conversion rates than Rufus alone, making AfS a retail sales driver as usage scales. Analysts said that their research on Similarweb data shows that the threat from third-party shopping agents has not materialized yet.
More Tech Stocks:
- Analysts reset Broadcom stock price target
- Bank of America resets Microsoft stock forecast after earnings
- Bank of America resets Google stock forecast before key event
Post said that Rufus generated nearly $12 billion of annualized incremental GMV in Q4 2025, and he believes AfS’s contribution to GMV can grow with usage. He estimates that over the next ten years, AfS can generate nearly $215 billion of incremental GMV by 2035, which could translate into $20 billion of incremental retail profit.
Post reiterated a buy rating for Amazon stock and the target price of $310, based on his sum-of-the-parts analysis that values AWS at 9x 2027 sales estimates, first-party retail at 1.0x, third-party retail at 2.5x, and advertising at 5.0x.
Analysts noted downside risks for Amazon:
- Increasing competition from offline and local retailers.
- Market share loss to cloud competitors with advanced AI technology.
- Elevated AWS investment needs that could pressure margins.
Analysts also said that the stock has been subject to significant volatility in the past, and that volatility could increase amid economic uncertainty.
What do other analysts think, and how does Bank of America’s opinion compare?
According to TipRanks, 45 of the 46 analysts covering Amazon stock rate it a buy. Only one gives a hold rating. The average price target is $319.
Related: Bank of America revamps Nvidia stock price target after earnings
