Amazon.com Inc. (NASDAQ:AMZN) analysts raised their price targets on the stock and questioned why shares were falling Friday after reporting better-than-expected second-quarter results.
- Bank of America analyst Justin Post reiterated a Buy rating and raised the price target from $265 to $272.
- RBC Capital analyst Brad Erickson maintained an Outperform rating and raised the price target from $230 to $240.
- Canaccord Genuity analyst Maria Ripps maintained a Buy rating with a price target of $280.
- Needham analyst Laura Martin maintained a Buy rating with a price target of $265.
- Rosenblatt analyst Barton Crockett maintained a Buy rating and raised the price target from $288 to $297.
- Telsey analyst Joseph Feldman maintained an Outperform rating and raised the price target from $235 to $265.
- Goldman Sachs analyst Eric Sheridan reiterated a Buy rating and raised the price target from $220 to $240.
Bank of America: The e-commerce giant's retail segment drove upside in the quarter. AWS, however, reported a mixed result, Post said in a new investor note.
"While AWS lost ground for revenues in 2Q, deal signings were strong and Amazon is still capacity constrained," Post said.
The analyst said it's "still very early' for the AI Cloud segment, with expected acceleration for Amazon.
Outside of AWS, the analyst said the retail segment is benefiting from a focus on speed and efficiency improvements.
RBC Capital: Erickson asks if Amazon has structural issues, or if this was just an off night for the company.
"AMZN had a mixed print and an even tougher conference call," Erickson said in an investor note.
The retail business is firing on "most if not all cylinders," he added. But AWS growth didn't accelerate like Amazon's peers in the markets.
"Margins missed and management's commentary on the call did little to attenuate investor fears that AWS may have a bigger structural issue in capturing its fair share of the growth from AI."
The analyst said they are confident in Amazon being able to accelerate AWS growth over time and the company restoring investor faith in the AI opportunity.
Canaccord Genuity: Amazon's retail segment was the highlight in the quarter for Ripps.
"Online stores revenue growing in the double-digits for the first time since 2Q21, in part reflecting ongoing momentum with Everyday Essentials," Ripps said.
The analyst also highlighted Amazon management commentary that demand has not been weakened due to tariffs or price increases.
While AWS garnered most of the headlines, Ripps said Amazon looks strong, with growth in Online stores and third-party seller services, as well as the company's focus on delivery speeds and a 20%+ year-over-year growth in advertising.
Needham: Martin says weak AWS results, lower than expected guidance and higher CapEx spending overshadow a strong quarter.
"What investors are most worried about are weak AWS margins," Martin said, citing 33% in the second quarter and 39% in the first quarter.
Amazon, as a service company, deserves a higher multiple than being labeled a products company, she added. The analyst notes that Amazon's Services revenue have been higher than its product revenue in the past 13 quarters.
The analyst lays out a sum-of-the-parts valuation for Amazon that is as follows:
- Subscription businesses: $323.6 billion
- Advertising revenue: $668.7 billion
- AWS Assets: $1.02 trillion
- Other Revs: $6 billion
Based on this valuation, Amazon's e-commerce business is worth $613 billion, or 1.3 times the estimated 2025 revenue for the segment, which Martin calls inexpensive.
"We are buyers of AMZN on weakness."
Rosenblatt: The weaker-than-expected growth for AWS comes with strong demand and a long runway, Crockett said.
"AWS failed to share in the accelerating growth of smaller rivals Microsoft Azure and Google Cloud," Crockett said." But AI-driven cloud compute is a marathon, not a sprint, and we still expect Amazon to run a solid race in that sector."
The analyst sees a focus on productivity, margin strength, and strong advertising growth as helping to offset some of the AWS concerns.
Telsey: All three of Amazon’s main segments are seeing sales growth and strong profits, Feldman said.
"We were encouraged to see sequential sales acceleration across all three segments," he added.
The analyst highlighted Amazon's product assortment and its focus on the high-growth category of everyday essentials.
"Amazon should continue to gain market share by leveraging its sticky Prime member base, small business relationships, and technological edge."
Goldman Sachs: While e-commerce growth and margins were strong, the Amazon debate going forward will be on AWS, Sheridan said in a new investor note.
Sheridan said the scaling of AI and non-AI workloads is likely to be the biggest drivers of investor sentiment going forward.
The analyst said AWS and tariffs are likely to remain key concerns for investors.
"We see AMZN as well-positioned for future outperformance," Sheridan said.
AMZN Price Action: Amazon stock is down 7.8% to $215.83 on Friday versus a 52-week trading range of $151.61 to $242.52. Amazon stock is now down 2.0% year-to-date in 2025.
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