Amazon.com’s (NASDAQ:AMZN) continued focus on innovation and cost-efficiency is driving significant shifts in its operational strategy, positioning the company for long-term growth. As the integration of advanced technologies like AI becomes more prevalent, Amazon’s ability to capitalize on these developments is increasingly seen as a critical factor in its financial performance.
Needham analyst Laura Martin maintained a Buy rating on Amazon and increased the price forecast from $220 to $265 on Tuesday.
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Martin raised their estimates and price target on Amazon, citing several key catalysts that signal further upside for the stock.
She pointed to strong AWS revenue growth, margin expansion in second-quarter 2025, and record-breaking Prime Day sales in third-quarter that are expected to boost the company’s outlook.
Martin noted that Amazon has moved past peak-tariff pressures and is now structurally lowering costs through the integration of generative AI into its logistics infrastructure. According to the analyst, these advancements improve automation efficiency across its fulfillment network.
She noted that another key driver is Amazon’s notable progress in labor productivity.
Martin noted this as a critical leading indicator of stock performance and highlighted it as a core metric that links employee quality directly to financial returns—absolute, trending, and relative—per employee.
From a valuation standpoint, the analyst noted Amazon as attractively priced. She said it trades at the lowest EV/Revenue and second-lowest EV/EBITDA multiples among major Big Tech peers.
As a result, Martin lifted her estimates across the board.
For second-quarter 2025, Martin forecasted net sales of $162 billion (+2% Y/Y), EBITDA of $38.1 billion (+7% Y/Y), and EPS of $1.30, up 9% from prior estimates despite being down 9% Y/Y.
For the full year 2025, the analyst’s estimates rose to $694.9 billion in net sales (+9% Y/Y), $161.8 billion in EBITDA (+15% Y/Y), and $6.20 in EPS (+12% Y/Y).
For 2026, she forecasted $763.3 billion in net sales (+10% Y/Y), $195.1 billion in EBITDA (+21% Y/Y), and EPS of $7.43, reflecting 20% Y/Y growth.
The bullish revisions reflect growing confidence that Amazon’s AI investments, operating leverage, and productivity improvements set the stage for sustained earnings momentum.
Price Action: AMZN stock is down 1.06% at $226.87 at last check Tuesday.
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