Amazon Adds AI Shopping Tool Interests: Buy, Sell or Hold the Stock?

Amazon.com AMZN has unveiled its latest AI-powered shopping innovation, Interests, designed to transform how consumers discover products through a personalized, conversational search experience. This new feature allows customers to create tailored prompts reflecting specific preferences, hobbies, and even budget constraints — from model building kits for hobbyist engineers to brewing tools for coffee lovers under $100.The feature, announced on March 26, 2025, leverages large language models to translate everyday language into search queries that traditional engines can process, resulting in more relevant product recommendations. Interests works continuously in the background, proactively notifying users about new inventory, restocks, and deals matching their specified preferences.Currently available to a select group of U.S. customers through the Amazon Shopping app on iOS and Android devices, as well as the mobile website, the company plans to expand access to more U.S. customers in the coming months.Amazon.com, Inc. Price and Consensus Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. QuoteStrategic AI Integration ContinuesThis launch follows Amazon's strong fourth-quarter 2024 earnings report, where the company achieved $187.8 billion in revenues (10% year-over-year growth) and $21.2 billion in operating income (61% year-over-year increase). The company's growing focus on AI innovation, particularly AWS developments, such as Trainium2 AI chips (which offer 30-40% better price performance than current GPU-based alternatives), Amazon Nova foundation models and enhanced features in Amazon Bedrock, holds promise. Interests joins Amazon's growing suite of AI-powered shopping tools, including the Rufus shopping assistant, AI Shopping Guides, and review summaries. This consistent integration of AI technologies across its retail platform demonstrates Amazon's commitment to enhancing customer experience through personalization while potentially increasing purchase frequency and average order value.Competitive Landscape IntensifiesAs e-commerce competition intensifies, other tech companies are developing similar AI-enhanced shopping experiences. Alphabet GOOGL-owned Google recently upgraded its Shopping tab with Vision Match, allowing users to describe desired items and receive AI-generated suggestions, along with AI summary tools for product information.Amazon's first-mover advantage in comprehensive AI-powered shopping tools, combined with its vast product selection and robust logistics network, positions it well against competitors in the evolving retail landscape, including Alibaba BABA and eBay EBAY.Investment Outlook: Hold or Wait for Better EntryWhile Amazon's AI innovations demonstrate promising long-term potential, investors might consider holding current positions or waiting for a more attractive entry point in 2025. The Zacks Consensus Estimate for AMZN’s 2025 net sales is pegged at $697.68 billion, indicating growth of 9.36% from the prior-year reported figure. The Zacks Consensus Estimate for 2025 earnings is pegged at $6.32 per share, which indicates a jump of 14.29% from the year-ago period. The figure has remained unchanged over the past 30 days.Find the latest earnings estimates and surprises on Zacks Earnings Calendar.Though the company exceeded fourth-quarter revenue expectations and showed impressive operating income growth, several factors warrant caution. The company faces increased capital expenditures, with fourth-quarter investments reaching $26.3 billion and similar spending expected throughout 2025, which could pressure margins in coming quarters.AWS growth, while improving at 19% year over year, continues to face robust competition and capacity constraints as noted by management during the earnings call. These constraints may limit the pace of AI-driven revenue acceleration in the near term, even as the company invests heavily in infrastructure to support future growth.For patient investors with existing positions, holding through 2025 appears prudent as Amazon's AI initiatives mature and begin generating meaningful returns. The company's consistent focus on customer experience enhancements and operational efficiency improvements provides a solid foundation for long-term growth. For those seeking new positions, waiting for potential market pullbacks may provide better entry points as the full financial impact of Amazon's AI investments becomes clearer throughout the year. AMZN currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amazon.com, Inc. (AMZN): Free Stock Analysis Report eBay Inc. (EBAY): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis Report Alibaba Group Holding Limited (BABA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks