Emerging Markets Show Strong Growth: Will AMZN Stock Benefit?

Amazon.com AMZN is increasingly leveraging emerging markets as a durable growth engine, making this geography a central catalyst for the e-commerce and technology giant. International operations remain structurally underpenetrated compared with North America, yet demand for e-commerce, digital payments and cloud-based services continues to accelerate across regions such as India, Latin America and parts of Southeast Asia. This creates a long runway where scale benefits can compound as logistics density improves and fixed infrastructure costs are absorbed over a larger revenue base.

Emerging market fundamentals strongly favor Amazon's multi-year growth trajectory. Rising smartphone penetration, expanding middle-class populations and improving digital payment infrastructure create favorable conditions for e-commerce adoption in developing economies. In the third quarter of 2025, Amazon’s international segment generated $40.9 billion in revenues, reflecting 10% year-over-year growth, excluding foreign exchange. Operating income reached $1.2 billion, highlighting steady progress toward sustainable profitability as investments in developing regions mature.

Amazon's operational improvements, including reduced inbound lead times and enhanced fulfilment efficiency, create scalable frameworks applicable to emerging market logistics challenges. As digital commerce penetration in emerging markets remains in early stages compared to developed economies, Amazon's established infrastructure provides competitive advantages to capture a disproportionate share of incremental growth.

The Zacks Consensus Estimate for fiscal 2026 Amazon's international revenues is pegged at $160.51 billion, up 12.31% year over year. As emerging markets contribute meaningfully to this outlook amid strengthening structural tailwinds, Amazon appears well-positioned to benefit from geographic expansion as a durable growth catalyst.

Amazon Faces Regional Competition in Emerging Markets

Amazon faces competition from regional players in emerging markets, though with notable operational advantages. Sea Limited SE operates Shopee across Southeast Asia and Latin America, competing in price-sensitive markets where Sea Limited struggles with unit economics despite user growth. MercadoLibre MELI dominates Latin American e-commerce with localised fintech capabilities, though MercadoLibre's geographic concentration creates exposure to regional volatility. 

Amazon's diversified model spanning e-commerce, cloud infrastructure and advertising provides revenue streams that Sea Limited and MercadoLibre cannot replicate. Amazon's established logistics network and operational discipline support sustained profitability, contrasting with Sea Limited's challenged unit economics and MercadoLibre's macroeconomic exposure as emerging market investments mature.

AMZN’s Share Price Performance, Valuation & Estimates

Amazon shares have returned 1.5% in the past six-month period compared with the Zacks Internet – Commerce industry and the Zacks Retail-Wholesale sector’s growth of 3.2% and 5.9%, respectively.

AMZN’s 6-Month Price Performance

AMZN stock appears overvalued, trading at a forward 12-month price/earnings ratio of 29.01X, higher than the industry’s 24.95X. Amazon has a Value Score of D.

AMZN’s Valuation

The Zacks Consensus Estimate for AMZN’s 2025 earnings is pegged at $7.17 per share, unchanged over the past 30 days. This indicates a 29.66% increase from the figure reported in the year-ago quarter.

Amazon.com, Inc. Price and Consensus

Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote

Amazon currently carries a Zacks Rank #2 (Buy). 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).

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