Bullish indicating open at $55-$60, IPO prices at $37
On Friday, Citi analysts revised the price target for Amazon.com (NASDAQ:AMZN) stock, adjusting it slightly downward from $275.00 to $273.00, while still upholding a Buy rating. The adjustment comes after Amazon’s fourth-quarter 2024 results were released. With a current market capitalization of $2.51 trillion and trading near its 52-week high, Amazon maintains its position as a dominant force in the market. According to InvestingPro analysis, the stock currently trades at a P/E ratio of 49.68, suggesting premium valuation metrics that reflect market confidence in the company’s growth trajectory.
The analysts expressed a cautiously optimistic stance on Amazon, highlighting that the 19% year-over-year growth of Amazon Web Services (AWS) met expectations. Despite the first quarter of 2025 revenue and operating income (OI) guidance falling below consensus, the analysts believe that substantial capital expenditure (CapEx) investments, projected to exceed $100 billion, will drive increased demand for AWS, particularly in the emerging GenAI sector. InvestingPro data reveals Amazon’s strong financial health with an overall score of "GREAT," supporting its aggressive investment strategy. The company’s impressive revenue of $620.13B and 11.93% year-over-year growth demonstrate its continued market momentum.
Citi’s analysis took into account the impact of foreign exchange (FX) rates on the lower guidance, noting that without the one-time $920 million cost associated with server disposals, Amazon’s fourth quarter operating income would have been $22.1 billion, surpassing the expected guidance range of $16 billion to $20 billion. For investors seeking deeper insights, InvestingPro offers comprehensive analysis with 15+ additional ProTips and detailed financial metrics in its Pro Research Report, one of 1,400+ available for top US stocks.
The firm also pointed out the record high operating income margins of 8% in North American Retail, attributing the success to faster delivery speeds that seem to boost order frequency, especially for essential and non-discretionary goods. Additionally, the analysts suggested that Amazon’s retail segment is just beginning to reap benefits from optimizations in inbound shipping.
In their comments, Citi analysts underscored their confidence in Amazon’s potential for retail strength, increased demand for AWS powered by GenAI, and expanding margins. They recommended investors to consider purchasing Amazon shares, especially if any market dislocation presents a buying opportunity. Despite the minor reduction in the price target, the firm reiterated its Buy rating, signaling continued support for Amazon’s stock.
In other recent news, Amazon has seen a series of positive analyst recommendations and forecasts. Pivotal Research Group has reiterated its Buy rating on Amazon, maintaining a $260 price target and predicting an 11% revenue compound annual growth rate (CAGR) over the next five years. This growth is expected to be driven by a 25+% CAGR in Amazon Web Services (AWS) and a 7% increase in other business segments.
Canaccord Genuity has also maintained a Buy rating on Amazon, raising its price target to $280 after the company reported Q4 results in line with expectations. The firm noted Amazon’s expansion of its delivery capabilities and growth in its Advertising business.
DA Davidson analysts have increased their price target on Amazon to $280, maintaining a Buy rating. They highlighted the company’s ability to improve profitability in its Retail division and the robust expansion of AWS.
Piper Sandler has increased its price target to $265, maintaining an Overweight rating on Amazon’s shares. The firm noted the company’s capital expenditures are expected to rise due to investments in artificial intelligence.
Lastly, Amazon is reportedly preparing to launch a significant update to its Alexa generative artificial intelligence (AI) voice service. This move is expected to entice some of its hundreds of millions of users to become paying customers. These are all recent developments in Amazon’s business operations.
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