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On Friday, BofA Securities adjusted its outlook on Amazon.com (NASDAQ:AMZN) shares, increasing the price target to $230.00 from $225.00, while reiterating a Buy rating for the e-commerce giant. According to InvestingPro data, Amazon commands a substantial market capitalization of $2.02 trillion, with analysts maintaining a strong buy consensus and price targets ranging from $195 to $287.
The adjustment comes amidst a period of stability for Amazon in 2025, with BofA Securities acknowledging the company’s significant third-party (3P) seller revenue exposure to China and imports. Despite Amazon Web Services (AWS) losing some traction to Microsoft (NASDAQ:MSFT)’s Azure in the first quarter, the platform’s overall performance has remained steady this year. The company’s revenue grew 11% in the last twelve months, with InvestingPro analysis showing strong financial health metrics and robust cash flows to cover debt obligations.
BofA Securities highlighted that Amazon’s stock is currently trading at an 8-point price-to-earnings (P/E) discount compared to Walmart (NYSE:WMT), suggesting potential for growth especially if trade agreements materialize in the coming three months. While Amazon’s current P/E ratio stands at 33.7x, InvestingPro analysis reveals 10+ additional valuation insights and metrics available to subscribers, helping investors make more informed decisions. The firm also noted the possibility of cloud growth acceleration for AWS in the second half of the year as the company increases capacity.
The analyst’s commentary pointed out that, although AWS has not directly benefited from the surge in ChatGPT usage that has favored Azure, corporate spending on AWS has continued without significant decline, showing only a 1-point deceleration excluding the impact of the Leap Year in the first quarter.
The firm’s decision to raise the price target is based on higher estimates and stable sum-of-the-parts (SOP) multiples, indicating a positive outlook for Amazon’s performance in the near term.
In other recent news, Amazon reported strong financial results for the first quarter of 2025, exceeding Wall Street expectations with earnings per share of $1.59, surpassing the forecasted $1.37. The company’s revenue also outperformed predictions, reaching $155.7 billion compared to the anticipated $155.29 billion. Amazon Web Services (AWS) continues to be a significant revenue driver, showing a 17% year-over-year increase. Morgan Stanley (NYSE:MS) maintained an Overweight rating on Amazon, with a price target of $250, highlighting the company’s potential for retail market share gains. However, they expressed caution about future costs related to a new China tariff agreement. HSBC adjusted its price target for Amazon to $240 from $280, maintaining a Buy rating, citing tariff uncertainties but noting the resilience of AWS as a critical factor in Amazon’s valuation. Despite these challenges, Amazon’s guidance for the second quarter of 2025 projects net sales between $159 billion and $164 billion. The company remains focused on expanding AI capabilities and addressing potential tariff impacts on strategic planning.
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