Amazon stock price target raised to $315 from $300 at Mizuho

Investing.com - Mizuho has raised its price target on Amazon.com (NASDAQ:AMZN) to $315 from $300 while maintaining an Outperform rating on the stock. Amazon, currently trading at $254 with a market cap of $2.72 trillion, has shown strong momentum with a 10.8% return over the last week and is trading near its 52-week high of $258.60.

The price target increase reflects higher multiples based on increased confidence following Amazon’s third-quarter results, management commentary, and the recently announced OpenAI partnership. According to InvestingPro data, 19 analysts have revised their earnings upwards for the upcoming period, with the overall analyst consensus maintaining a Strong Buy recommendation.

Mizuho believes the stronger quarterly results, positive commentary on Amazon’s Trainium chips, and the OpenAI deal strengthen confidence in the long-term growth prospects for Amazon Web Services (AWS). This optimism aligns with Amazon’s solid fundamentals, as the company reported $691.33 billion in revenue with 11.48% growth over the last twelve months.

For the fourth quarter, Mizuho forecasts a slight acceleration to 21.4% growth in AWS, with overall company revenues of $212 billion compared to Amazon’s guidance range of $206-213 billion, and operating income of $25.3 billion versus guidance of $21-26 billion.

Mizuho has updated its valuation model, increasing the EV/revenue multiple used for AWS to 12x from 10x previously, while establishing a bull/bear framework with targets of $380 and $185 per share, representing potential upside of 50% or downside of 27% from current prices. While Amazon trades at a P/E ratio of 35.38, its PEG ratio of 0.67 suggests it may be undervalued relative to its growth prospects. InvestingPro analysis indicates Amazon is slightly overvalued compared to its calculated Fair Value, with 17 additional ProTips available to subscribers through the comprehensive Pro Research Report.

In other recent news, Amazon.com has secured a significant seven-year, $38 billion agreement with OpenAI to supply cloud capacity through its AWS division. This partnership will utilize Amazon EC2 UltraServers to support OpenAI’s artificial intelligence workloads. Additionally, Amazon has entered into a $5.5 billion, 15-year lease agreement with Cipher Mining Inc. to provide space and power for AI workloads, with capacity delivery starting in 2026. Analyst firms have responded positively to these developments. New Street Research raised its price target for Amazon to $340, citing expected AWS revenue acceleration in the coming years. HSBC also increased its price target to $300, highlighting the importance of the OpenAI deal. Wedbush echoed this sentiment, raising its target to $340 and maintaining an Outperform rating. Meanwhile, William Blair reiterated its Outperform rating, pointing to Amazon’s compelling valuation and competitive advantages across its business segments.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.