The Amazon (NASDAQ:AMZN) stock price is around $3,400 right now. It’s moved up by about 8% since the start of the year. During May, Amazon was the only FAAMG stock that performed poorly, reporting an approximate 5% decline. The stock is up by nearly 30% over the last 12 months. But relatively speaking, that’s a pretty lacklustre performance from this business. So what’s next for the Amazon stock price? 

Performance during the pandemic

The Amazon stock price grew from $1,848 from 2019 to over $3,400 today. That’s a 74% rise in a relatively short space of time! By comparison, the S&P 500 only managed a 69% increase over the same period. As I see it, the main driving force is the rapid and somewhat forced adoption of e-commerce due to the pandemic. Consequently, Amazon generated a revenue of $386 billion in 2020, a 38% boost compared to 2019. Meanwhile, its earnings per share shot up by 82%! That is quite extraordinary for a business with a trillion-dollar valuation, in my opinion.

And this growth isn’t slowing down. 2021 Q1 results beat expectations once again. Revenue for the quarter grew by 44% year-on-year to $108.5bn, while earnings expanded by 200%. 

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Growth opportunities driving the Amazon stock price

Amazon kicked off the year 2021 with some big plans. The company is expanding its virtual health care offerings and also planning to increase the prescription drug business. What’s more, it announced Amazon Care, a telehealth pilot program. This telehealth program will benefit its U.S. employees and their families. Suppose Amazon can succeed in the health care area. In that case, it could be a substantial driving force for Amazon stock price and accelerate the firm’s growth.

In addition to health, the retailer recently announced that it is acquiring the renowned film studio Metro-Goldwyn-Mayer. This acquisition is an excellent step towards expansion in the online video streaming business, I feel. It is, after all, the studio behind the James Bond film series. With more high-quality content headed for the Amazon Prime Video platform, this will more than likely help increases the active number of subscribers. Needless to say, that would be excellent news for the Amazon stock price.

Another driving engine for the current year is advertising. Roughly half the U.S. population use the Amazon platform to search for items. These statistics attract more and more advertisers to the website while providing Amazon more pricing power over ad placements. 

There are some threats on the horizon

Amazon has been in the news recently, following the announcement that it is being investigated by The Competition and Markets Authority. The retailer giant is being accused of fake five-star reviews.  That’s quite a serious acquisition. And if it turns out to be true, beyond the legal penalties, Amazon’s reputation may be significantly tarnished, leading to customers doing their online shopping elsewhere. 

Beyond this threat, regulators have long since been placing pressure on the company due to its size. Encouragingly, the company has smartly handled all pressure, I feel. But the new chair of the Federal Trade Commission, Lina Khan, is not a big fan of the company. With Amazon’s dominance growing over US retail, further pressure and risk of regulatory changes are more than likely, in my opinion. What effect this will have on the Amazon share price has yet to be seen. But it’s something I’ll be watching closely.

The Amazon stock price: moving forward

The recent regulatory changes and the risk of potential court actions could swipe off the company’s value in no time. Having said that, I believe the shift towards e-commerce will continue in the post-Covid-19 world. With continuous improvement to the online shopping experience, I think the Amazon stock price will continue to climb over the long term. Therefore, despite the threats, I would still consider adding it to my portfolio today.