Amazon.com Inc AMZN analysts weigh the impact of strong fourth-quarter results with weaker-than-expected first-quarter guidance and high CapEx guidance for 2025 after the company’s latest financial results.
The Amazon Analysts:
- DA Davidson analyst Gil Luria reiterated a Buy rating on Amazon and raised the price target from $235 to $280.
- Wedbush analyst Scott Devitt reiterated an Outperform rating with a $280 price target.
- Bank of America analyst Justin Post reiterated a Buy rating and raised the price target from $255 to $257.
- RBC Capital analyst Brad Erickson maintained an Outperform rating and raised the price target from $255 to $265.
- Scotiabank analyst Nat Schindler maintained a Sector Outperform rating with a $306 price target.
- Benchmark analyst Daniel Kurnos maintained a Buy rating and raised the price target from $265 to $270.
- JMP analyst Nicholas Jones maintained a Market Outperform rating with a $285 price target.
- Needham analyst Laura Martin maintained a Buy rating with a $250 price target.
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DA Davidson on AMZN: AWS growth is the key highlight from Amazon’s quarterly results, Luria said in a new investor note.
“AWS winning in AI with better investment discipline,” Luria said.
The analyst said management commentary suggests AWS is seeing growth in both AI and non-AI services.
“Amazon Web Services sustained 19% growth pulling away from Microsoft Azure and Google Cloud who decelerated in the quarter.”
Luria said AWS could accelerate even more when the company is less capacity-constrained, based on management commentary.
“We continue to believe that AWS is the best positioned of the three hyperscalers.”
Wedbush on AMZN: Devitt said Amazon’s operating income 11% above consensus was a key highlight in the quarterly results.
The analyst said there is concern about the company’s first-quarter revenue and operating income guidance.
“We expect there is some conservatism embedded in management’s outlook, and we highlight the company has outperformed the high end of its operating income guidance in each of the last 8 quarters,” Devitt said.
The analyst said items like fulfillment optimization and a shift toward higher-margin advertising and AWS revenue could help margin improvement.
Bank of America on AMZN: Capex spending of more than $100 billion in 2025 was one of the biggest takeaways in the quarter, Post said in a new note.
“Mgmt sees ‘significant signal’ on demand, with ‘virtually every’ application eventually to incorporate AI, plus new momentum in core customers returning to modernizing cloud infrastructure across both core and GenAI services,” Post said.
The analyst said the investment could pressure margins but comes with AI as one of the biggest tech themes of the last 10 years.
“With AWS as big potential beneficiary, we believe Amazon has earned the benefit of the doubt on investment spend.”
RBC Capital on AMZN: The company’s Capex guidance is likely a positive for Amazon bulls, Erickson said in a new note.
“While the name is crowded and the AI ‘spend money to make money’ debate will undoubtedly continue, the combo of AWS’s high margin growth and further network cost efficiencies have the company poised to continue growing earnings at a level supportive of this valuation,” Erickson said.
The analyst said Amazon’s strong AI position and opportunity can help justify the stock’s valuation.
Scotiabank on AMZN: A strong fourth quarter could be overshadowed by AWS constraints and weaker than expected guidance, Schindler said in a new note.
“Our long-term thesis remains the same: retail margins can be a driver for earnings growth over the middle to long-term horizon, and AWS will continue to be a powerhouse growth driver,” Schindler said.
The analyst said the quarter showed that Amazon has “levers to pull to drive further profitability.”
“AWS continues to be a long-term profit engine.”
Schindler said Amazon is balancing margin expansion in retail, advertising and logistics with its heavy CapEx investment for AI growth.
“The timing gap between AI investment and monetization remains a key dynamic in 2025.”
Benchmark on AMZN: Weak guidance and a share drop could provide a buying opportunity in Amazon, Kurnos said in a new note.
The analyst said AWS supply constraints easing in the second half of 2025 and revenue expectations being reset could set up the year “fairly nicely” for Amazon.
“We would be buyers on the dip,” Kurnos said.
The analyst cautions that the second half of 2025 does have some tough comp sales including in Amazon’s retail segment.
JMP on AMZN: A strong fourth quarter report included strong operating margins, Jones said in a new note.
The analyst said weaker than expected guidance for revenue and operating income sent shares lower Thursday after market close.
“The stock had run up almost 10% in the two weeks heading into results, reflecting heightened expectations,” Jones said.
The analyst said demand for AI is “robust” and AWS results could have been better if not for capacity constraints.
“While investors were looking for better 1Q guidance, we remain encouraged by AMZN’s commentary around return on capital expenditure over the medium to long term as the company continues to position itself to capture traditional cloud migration and AI budgets.”
The analyst said Amazon should continue to gain market share across several business segments, along with improving margins.
Needham on AMZN: Martin said Amazon is the “right leader” at the “right place” at the “right time” in a new investor note.
“Of all the hyperscalers, AMZN is pivoting fastest toward the GenAI future because AMZN’s current CEO came from the Cloud business so, for him, it isn’t a pivot at all,” Martin said.
The analyst is a buyer of Amazon with the GenAI operating leverage and operating margins growth, AWS revenue growth and the results showing the business segments with the highest margins having the fastest growth.
“We believe that AMZN should be valued as a Services company rather than a Products company. Services operating margins (including Advertising, Subscriptions, Cloud, etc) are far larger and growing faster than AMZN’s core eCommerce business.”
AMZN Price Action: Amazon stock is down 3.4% to $230.61 on Friday versus a 52-week trading range of $151.61 to $242.62. Amazon stock is up 35% over the past year.
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