Amazon’s (AMZN) latest earnings report sent its stock price down in today’s trading, but Wall Street analysts remain bullish on the tech company’s prospects. Despite a lackluster outlook for FY25 and expected growth in its cloud services business, analysts see the decline as a buying opportunity. Evercore’s five-star analyst, Mark Mahaney, described the decline as an “Expectations Correction” rather than a “Fundamentals Correction.”
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Indeed, Amazon’s profitability remains a strong point as its Q4 operating margin hit a record high. The company’s cloud service, AWS, continues to drive profitability with its 19% revenue growth rate. Amazon’s retail business also saw a solid performance and has plans to accelerate investments in robotics and automation in order to achieve more durable and profitable growth.
As a result, analysts at Morgan Stanley and Evercore maintained their positive ratings on Amazon, with price targets of $280 and $270, respectively. In addition, Amazon’s CFO predicted a $115 billion annualized run rate for its cloud business, which will receive the majority of the company’s capital investments this year. While supply constraints may create near-term volatility, analysts remain optimistic about AWS’s long-term growth prospects, with potential upside from the broader adoption of GenAI.
Is Amazon Stock Expected to Rise?
Overall, analysts seem to agree with Truist. Indeed, Wall Street has a Strong Buy consensus rating on AMZN stock based on 43 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 35% rally in its share price over the past year, the average AMZN price target of $265.48 per share implies 15.5% upside potential.
