The bar for Amazon earnings was set high, and while the e-commerce giant did well in the second quarter, its guidance left Wall Street wanting more. The “Magnificent Seven” titan reported earnings of $1.68 per share on revenue of $167.7 billion. These exceeded LSEG consensus estimates. Amazon also forecast revenue in its current quarter to land between $174 billion to $179.5 billion, which would present year-over-year growth of $173.1 billion. But analysts were left disappointed after Amazon offered lackluster operating income guidance for the third quarter. Amazon expects operating income to range between $15.5 billion and $20.5 billion, while analysts surveyed by StreetAccount had penciled in $19.48 billion. Shares of Amazon were last 8% lower in premarket trading hours Friday. Overall, analysts maintained their bullish stance on Amazon, with a few hiking their price targets and noting that shares look compelling after their Friday decline. Some also pointed to Amazon’s generative artificial intelligence investments as a forward catalyst for the stock. Here’s what analysts at some of Wall Street’s biggest shops had to say on the report. Goldman Sachs keeps buy rating, raises price target to $240 per share from $220 Analyst Eric Sheridan’s new target implies about 3% upside from Thursday’s close. “Away from these shorter-term debates on consumer demand, tariffs and AWS, we remain constructive on the shares and reiterate our view that Amazon can produce a solid mix of compounded revenue growth and operating margin expansion on a multi-year horizon while continuing to make critical investments in long-term growth initiatives.” JPMorgan reiterates overweight rating, lifts price target to $265 from $255 JPMorgan’s forecast corresponds to upside of around 13%. “AMZN reported solid overall results w/sales accelerating to 12% FXN growth & operating income growing 31% (11.4% margin), both nicely above guidance & expectations. Stores performance was standout, w/AMZN navigating early tariff impact extremely well, w/no visible impact of lower consumer demand or higher prices … we continue to expect better AWS growth in 2H — 18.5% in 3Q & 19.0% in 4Q — and our overall estimates increase coming out of earnings, w/higher Stores profit offsetting lower AWS margins.” Citi stands by buy rating, increases price target to $270 per share from $265. Citi’s target calls for 15% upside going forward. “While the debate coming out of 2Q is likely to be around AWS share losses as both Azure and Google Cloud reported accelerating revenue growth in 2Q versus AWS’ consistent 17% Y/Y growth, with AWS Commitments growth reaccelerating to +24.5% Y/Y, we believe it highlights continued demand strength as AWS alleviates its infrastructure capacity constraints. This as 2Q results were better than expectations with revenue 3% above consensus and OI 10% above the high-end of guidance led by re-accelerating eCommerce and advertising growth … Bigger picture, given our view that AWS’ infrastructure capacity constraints are likely temporary as its eCommerce results highlight continued share gains, we reiterate our Buy rating, raise our TP to $270, and would take advantage of any dislocation in shares.” UBS keeps buy rating and $271 price target Analyst Stephen Ju’s price objective equates to 16% upside. “By our calculation, the difference between rounding up to reach the high end of investor expectation of 18% for AWS YOY growth vs rounding down to just 17% and therefore a “miss” is some $10M in revenue, which on a $31B quarterly revenue franchise to result in a ~$150B decrease in market cap seems extreme. We acknowledge that part of the pullback in AMZN shares was due to the lack of a more explicit confirmation of potential revenue acceleration, even as CapEx budgets for AWS work higher … We continue to believe Amazon is a coiled spring and reiterate our Buy rating on this pullback, particularly as our ests. edge higher on the back of better-than-expected e-commerce and advertising results.” Bank of America maintains buy rating and raises price target to $272 from $265 The bank’s new target implies a rally of 16% ahead. “Retail is benefitting from speed & efficiency improvements (Shipping Cost per Unit down Y/Y & Q/Q). AWS lost ground to Azure in 2Q, but Cloud growth can be lumpy, and though AWS is not seeing the benefit of ChatGPT usage, broader enterprise GenAI adoption remains a growth catalyst.” Barclays reiterates overweight rating, increases price target to $275 from $240 Analyst Ross Sandler’s new forecast is 17% above Amazon’s current price. “Nearly every line in AMZN’s retail business accelerated in 2Q, but we’re still waiting for AWS to have its moment in the sun around AI workloads driving acceleration. The tone around 2H sounds upbeat, but we aren’t surprised to see shares trade off after the underperformance vs. Azure and GCP.” Deutsche Bank keeps buy rating, ups price target to $278 from $266 The bank’s updated price forecast is approximately 19% above where shares of Amazon closed on Thursday. “All in however, with the e-commerce business operating at a level that is clearly indicative of accelerating share gains coupled with multiple levers for margin expansion, Advertising revenue growth accelerating in the quarter, the commerce side of the house is operating at an exceptional high level, compounding operating income growth at by our estimates at 12.5% CAGR between 24-27 … we believe that today’s weakness should serve as a compelling buying opportunity for AMZN shares with any degree of duration. Put simply, with generative AI accelerating the shift towards a digital economy, thus unlocking infrastructure spend that we expect to measure in the trillions of dollars over time, and AWS still in pole position in terms of cloud scale to take advantage of this shift, current market share concerns are likely to prove transitory.” Morgan Stanley stands by overweight rating and $300 price target The firm forecasts 28% upside ahead. “Retail growth and profit improvements are shining and driving earnings. 2Q AWS growth was better and we detail why we see faster growth ahead. Remain OW, $300 PT. AMZN remains Top Pick.”
Analysts stick by Amazon despite sell-off due to mixed guidance
