Bullish indicating open at $55-$60, IPO prices at $37
On Friday, Cantor Fitzgerald confirmed its positive stance on Amazon.com (NASDAQ:AMZN), maintaining an Overweight rating and a price target of $270.00. This aligns with the broader Wall Street sentiment, as InvestingPro data shows Amazon maintains a strong buy consensus with an average analyst rating of 1.39. The firm’s analyst, Deepak Mathivanan, highlighted Amazon’s fourth-quarter results, noting that revenue was largely in line with expectations and EBIT was 12% higher than Wall Street estimates, as reported by Visible Alpha. Amazon Web Services (AWS) continued to show stable growth at 19% year-over-year, excluding foreign exchange impacts, with expectations of further improvement in the second half of 2025 due to capacity expansions. The company’s overall revenue growth remains robust at 11.93% over the last twelve months, according to InvestingPro data, which also reveals the company’s impressive market capitalization of $2.51 trillion.
Despite the first quarter revenue guidance of $151 to $155.5 billion and operating income (OI) forecast of $14 to $18 billion falling short of analyst expectations at the mid-point, Mathivanan emphasized Amazon’s strong fundamentals. The company’s full-year 2026 capital expenditure guidance is set near $105 billion, marking a 35% year-over-year increase, reflecting continued investment in technical infrastructure. InvestingPro analysis shows Amazon’s financial health score is "GREAT" at 3.16, supporting the company’s aggressive investment strategy.
Mathivanan pointed out that while the capital expenditure guidance for the first quarter and full year 2025 might put short-term pressure on Amazon’s share price, the company’s long-term prospects remain robust. He cited potential for margin expansion in the retail sector and acceleration in AWS growth as reasons to reiterate the Overweight rating and $270 price target. The firm believes that Amazon’s investments are laying the groundwork for sustained growth and profitability in the years to come. This optimism is reflected in the stock’s performance, with InvestingPro showing a strong 46.73% return over the past six months, though the current P/E ratio of 49.68 suggests a premium valuation.
In other recent news, Amazon.com demonstrated robust performance in its fourth quarter of 2024, with both Telsey Advisory Group and BMO Capital Markets maintaining their Outperform ratings. The company’s total revenue rose 10.5% to $187.8 billion, with operating income surging by 60.5% to $21.2 billion. North American Retail sales grew by 9.5%, while Amazon Web Services (AWS) saw an 18.9% rise. These recent developments were attributed to strong sales during key shopping events and the ongoing high demand for cloud and artificial intelligence products.
BMO Capital Markets, in particular, highlighted the potential for AWS’s growth, revising its 2025 estimated AWS revenue growth to 20% from 19%. BofA Securities and Goldman Sachs also noted Amazon’s strong performance, with Goldman Sachs citing a 19% year-over-year growth in AWS revenue. Despite the impact of foreign exchange rates and the absence of Leap Day, Amazon’s guidance for the first quarter of 2025 implies a steady year-over-year growth of 11% at the higher end, excluding these items.
On the other hand, Citi analysts revised their price target for Amazon slightly downward, from $275.00 to $273.00, while still upholding a Buy rating. They expressed optimism about Amazon’s potential for retail strength, increased demand for AWS powered by GenAI, and expanding margins. Despite the minor reduction in the price target, the firm reiterated its Buy rating, signaling continued support for Amazon’s stock.
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