Top Analysts Raise Amazon Stock (AMZN) Price Target Despite Pullback on Q2 Earnings
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Top Analysts Remain Bullish on AMZN Stock
Following the Q2 print, Bank of America Securities analyst Justin Post increased the price target for Amazon stock to $272 from $265 and reiterated a Buy rating. The 5-star analyst noted the Q2 revenue and earnings beat. He added that while AWS growth accelerated 60 basis points quarter-over-quarter to 17.5% and was slightly above Street, it lacked a 'capacity-aided top-line beat' similar to Azure and Alphabet's (GOOGL) Google Cloud Platform (GCP).
Additionally, Post noted that AWS margins missed expectations, with over half of the 6.5 percent quarter-over-quarter decline attributed to stock-based compensation (SBC) and forex headwinds. It was also impacted by growing depreciation. On the positive side, Post highlighted that Q3 revenue guidance of $174 billion to $179.5 billion beat the Street's expectation of $173 billion, boosted by a solid Prime Day, with a profit outlook of $15.5 billion to $20.5 billion bracketing the consensus estimate of $19.4 billion.
Likewise, Barclays analyst Ross Sandler raised the price target for AMZN stock to $275 from $240 and reaffirmed a Buy rating. The 5-star analyst stated that he suspected 'knives would come out on AWS,' given that rivals' June quarter revenue and backlogs accelerated on AI, and also due to the margin miss. That said, Sandler has not lost any faith and expects AI to add a couple of points by the fourth quarter on Anthropic and other applications built on Claude-4's API. Meanwhile, the analyst highlighted that Amazon's retail posted a strong quarter again, with efficiency reaching all-time highs.
Finally, DA Davidson analyst Gil Luria increased the price target for Amazon stock to $265 from $230 and reiterated a Buy rating. The top-rated analyst stated that despite the accelerating revenue in Amazon's retail business and stabilizing growth in AWS, Q2 results were largely overshadowed by capex guidance that is expected to see infrastructure investments accelerate through the second half of the year. Nonetheless, Luria noted that management continues to reiterate that they're seeing an acceleration of customers' transition to the cloud, along with demand for compute still exceeding supply at AWS.
Is Amazon Stock a Buy, Sell, or Hold?
Overall, Wall Street has a Strong Buy consensus rating on Amazon stock based on 44 Buys versus one Hold recommendation. The average AMZN stock price target of $265.05 indicates 23.4% upside potential from current levels.
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