Amazon (NASDAQ:AMZN) stock is finally showing signs of magnificence after struggling to break out past the $200 level meaningfully. Indeed, 2022 was quite a disastrous year for AMZN shareholders, as the stock paid the price for overinvesting in warehouse and logistics in the earlier pandemic years.

More recently, things have looked up for Amazon stock. As the $2.25 trillion Mag-Seven behemoth looks to extend its “relief” rally that began at the very start of 2023, I think a strong case could be made that AMZN stock could be the Mag-Seven firm to beat in the new year. And with that, I do view AMZN stock as in the running to be the next Mag Seven stock to split.

Today, the stock goes for $214 and change per share and is fresh off a sudden 33% surge off its August 2024 lows. Indeed, the momentum will need to continue going strong if shares reach levels that warrant a split.

Undoubtedly, AMZN has gone long periods of time without splitting. The stock has traded in the four-figure range in the past. That said, I think the days of four-figure AMZN shares aren’t coming back — not while Amazon stock is in the price-weighted Dow Jones Industrial Average.

So, what price point do I think would warrant a split? In my opinion, around $400 per share makes the most sense — around 87% upside from here.

Key Points About This Article

• As Amazon continues executing its AI plans, a split may not be all too far off.
• I’d look for the $400 range as a level that’d warrant a split. AMZN stock could hit the level under Trump.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

Amazon has a path to $400 per share, thanks to AI.

Looking ahead, Amazon looks to be sparing no expense when it comes to efforts that can help it catch up to rivals in the AI race. Is there a risk of overspending on AI, just as there was when Amazon placed big bets to expand its warehouse network amid the worst of the COVID crisis?

Most definitely. However, there’s also the risk of not spending enough on AI as the biggest, brightest titans in tech give their all to build the AI agents of the future. In a prior piece, I noted that Amazon was not one of the firms that would risk underinvesting in AI, given the stakes.

Who knows? Perhaps the so-called AI race will turn into an AGI (artificial general intelligence) race shortly.

Of course, nobody knows for sure when a firm will achieve true AGI. Many pundits and futurists have varying viewpoints. Perhaps there’s no better pundit to listen to than OpenAI’s Sam Altman, a man who envisions AGI arriving in 2025, a heck of a lot sooner than most projections out there.

Though Amazon doesn’t really have a high-profile consumer-facing large language model (LLM) on the market that stacks up to the likes of a ChatGPT or Claude (Anthropic’s model), investors shouldn’t count it as a laggard in the AI race.

Why?

First, Amazon has made a substantial investment in Anthropic, the firm behind Claude, a very capable and popular alternative to ChatGPT with all the tools needed to achieve AGI. Undoubtedly, Anthropic has garnered a lot of hype in recent years. And though it’s tough to tell if it can beat ChatGPT, I view Amazon’s Anthropic investment as similar to the Microsoft (NASDAQ:MSFT) investment in OpenAI.

Second, Amazon is working on lucrative projects that could hit the ground running at some point in the next couple of years. Whether we’re talking about AI on AWS, the next Alexa, or its Olympus and Amelia chatbots, the e-commerce giant has innovations with the potential to gain a considerable amount of users upon launch.

Perhaps most importantly, it’s taking its time with its AI efforts. I’m pretty sure Amazon could have released an LLM by now if it was okay with stumbling upon bugs along the way. Either way, Amazon’s more disciplined approach to AI, I believe, is a sign that it’s focused on delivering a quality product rather than being pressured to launch prematurely.

The bottom line

Given the AI tailwinds at Amazon’s back, I think there’s ground to catch up in the AI race. And if it can narrow the gap, I’d not be surprised if $400 per share happens at some point under Trump’s presidency. Additionally, tech deregulation may also be a boon for the firm as it looks to seize more AI M&A opportunities as rates drop off.

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