AmazonAMZN continues to gain momentum from its aggressive international expansion strategy. In the second quarter of 2025, international segment sales rose 16% year over year to $36.8 billion, outpacing North America’s 11% growth. Management highlighted it as a strong quarter for both revenue and profitability, with operating margin improving by 320 basis points. The acceleration from just 5% growth in the first quarter underscores how rapidly Amazon’s overseas retail operations are gaining momentum.
A key driver of this success is the expansion of Prime Video advertising into fast-growing markets such as Brazil, India, Japan, the Netherlands and New Zealand. This move not only enhances monetization opportunities but also strengthens user engagement in high-growth regions. Additionally, Amazon is deploying AI-driven tools, generative AI and robotics to streamline shopping experiences and improve delivery efficiency worldwide. The company’s €700 million investment in European logistics and automation aims to accelerate delivery speeds, lift order conversion and lower long-term costs.
While international operations remain sensitive to currency headwinds and early-stage infrastructure costs, the growth trajectory remains strong. The Zacks model projects international sales to rise 8.4% in 2025 and 8.3% in 2026, supported by Amazon’s expanding global reach and efficiency gains.
Amazon’s technology-led expansion and focus on automation and premium services are laying the foundation for resilient, long-term growth in international sales. As emerging markets mature and efficiencies accelerate, its global operations are poised to become a powerful catalyst for sustained top-line expansion.
Amazon’s Biggest Challenges in Global Markets
Walmart Inc.WMT competes with Amazon globally by leveraging its vast physical retail dominance and grocery expertise. While Amazon leads in e-commerce, Walmart’s omnichannel strategy — integrating stores with digital platforms and BOPUS services — drives strong growth. Walmart International’s sales rose 10.5% (cc) in second-quarter fiscal 2026, fueled by China, Flipkart and Walmex. Through localized acquisitions like Flipkart, Walmart strengthens its global foothold, blending scale, logistics and grocery leadership, where Amazon continues to face challenges.
MicrosoftMSFT competes fiercely with Amazon through its Azure cloud platform, leveraging deep enterprise integration and hybrid flexibility. Microsoft’s global expansion of data centers ensures compliance and performance advantages across markets. Partnering with OpenAI, Microsoft embeds cutting-edge AI into Azure, strengthening its leadership in enterprise and AI cloud services. With robust infrastructure and trusted enterprise ties, Microsoft remains Amazon’s most formidable rival in global cloud dominance.
AMZN’s Share Price Performance, Valuation & Estimates
Amazon shares have returned 0.1% in the year-to-date period, underperforming the Zacks Internet – Commerce industry and the Zacks Retail-Wholesale sector’s growth of 12.4% and 8.1%, respectively.
AMZN’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, the AMZN stock appears overvalued, trading at a forward 12-month price/sales ratio of 3.07X, higher than the industry’s 2.26X. Amazon has a Value Score of D.
AMZN’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AMZN’s 2025 earnings is pegged at $6.76 per share, which has seen an upward revision of 3 cents over the past 30 days. This indicates a 22.24% increase from the figure reported in the year-ago quarter.
Image Source: Zacks Investment Research
Amazon currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
