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Investing.com - Oppenheimer raised its price target on Amazon.com (NASDAQ:AMZN) to $250 from $215 on Thursday, while maintaining an Outperform rating on the e-commerce and cloud computing giant. The company, currently trading at $209.78, has demonstrated robust financial health with an InvestingPro Overall Score of GREAT, supported by strong revenue growth of 10.08% over the last twelve months.
The price target increase reflects Oppenheimer’s higher margin expectations, which are now more aligned with Wall Street consensus due to an improved trade outlook compared to early May. The firm noted that e-commerce continues to outperform overall retail, with quarter-to-date non-store retailers growing 3.7% year-over-year versus retail excluding motor, parts, and gas at 2.7%. With a substantial gross profit margin of 49.16%, Amazon continues to demonstrate its operational efficiency. InvestingPro subscribers can access 8 additional key tips about Amazon’s financial performance and market position.
Oppenheimer significantly increased its fiscal year 2025 and 2026 e-commerce gross margin forecasts by 562 and 187 basis points to 9.1% and 10.5%, respectively. The firm also raised its consolidated EBIT margin estimates by 91 and 90 basis points to 11.4% and 12.8% for the same periods.
The firm maintained its Amazon Web Services (AWS) estimates unchanged, continuing to expect a modest second-half ramp as capacity becomes available. Oppenheimer also highlighted an internal memo from CEO Andy Jassy indicating plans to leverage artificial intelligence to limit headcount growth over time.
The new $250 price target implies a valuation of 9.5 times 2026 estimated AWS revenue, 5.0 times 2026 estimated e-commerce gross profit, or 23 times 2026 estimated EBIT, according to Oppenheimer’s analysis.
In other recent news, Amazon has announced an extension of its annual Prime Day event to four days in 2025, doubling the shopping time for its members. This extended event will offer 96 hours of deals and discounts across various categories, introducing a new feature called "Today’s Big Deals" with themed daily drops. In a significant development, Amazon is also exploring the issuance of its own stablecoin, which could potentially bypass traditional banking systems and save on transaction fees. This initiative is being considered alongside other major retailers like Walmart (NYSE:WMT) and is contingent on the progress of the Genius Act, a bill proposing a regulatory framework for stablecoins.
Additionally, Amazon CEO Andy Jassy has highlighted the company’s extensive integration of generative AI across its operations. Jassy indicated that as AI becomes more integrated, Amazon might see a reduction in its corporate workforce, as efficiency gains from AI could replace some current roles. In another move, Amazon is requiring some corporate employees to relocate to cities such as Seattle and Arlington, Virginia, to be closer to their managers and teams. This decision has created uncertainty among staff, particularly those with established family and career commitments. These developments come amid broader concerns about job security and the potential impact of AI on employment at Amazon.
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