Citi maintains Amazon stock Buy rating, $225 price target

On Thursday, Citi analysts, led by Ronald Josey, maintained a Buy rating on Amazon.com (NASDAQ:AMZN) stock with a steady price target of $225.00. The e-commerce giant, currently valued at $1.92 trillion, has seen its stock decline nearly 18% year-to-date. Ahead of the company’s first-quarter results for 2025, which are to be announced after the market closes on May 1, Josey expressed anticipation of performance that aligns with or slightly exceeds both their own and consensus expectations. According to InvestingPro data, analysts maintain a strong buy consensus with price targets ranging from $195 to $287.

The focus, however, shifts beyond the immediate quarter to the second quarter and the second half of the year. The analysts are keenly observing factors such as the impact of tariffs, Amazon’s exposure to China-based products and advertising, and the demand for Amazon Web Services (AWS). These elements are expected to play a significant role in shaping the company’s results, providing a clearer picture of Amazon’s financial trajectory. InvestingPro analysis shows Amazon maintains strong financial health with an overall score of "GOOD," supported by robust revenue growth of 11% in the last twelve months.

Despite acknowledging the challenges in visibility due to tariffs and broader economic conditions, the Citi team remains optimistic about Amazon’s standing. Their checks and a recent Chief Information Officer (CIO) survey indicate that the demand for AWS is relatively healthy. They also anticipate that Amazon’s management is unlikely to reduce their capital expenditure expectations for the year.

Amazon’s current valuation, trading at 25 times Citi’s estimated GAAP Earnings Per Share (EPS) for 2026 and 10 times their estimated Enterprise Value/Earnings Before Interest, Taxes, Depreciation, and Amortization (EV/EBITDA) for the same year, supports the firm’s reiteration of a Buy rating and the $225 price target. Citi’s stance reflects confidence in Amazon as a fundamental holding in the internet sector, even as the company navigates the complexities of the current economic landscape.

In other recent news, Amazon has announced the general availability of its Bedrock Intelligent Prompt Routing, a tool designed to enhance the efficiency of directing requests between different foundation models. This development follows a period of enhancements driven by customer feedback and internal testing. Additionally, Telsey Advisory Group has adjusted its price target for Amazon, reducing it to $235 from $275 while maintaining an Outperform rating. This adjustment reflects concerns over potential tariff impacts on consumer spending and operating costs, despite positive growth expectations. Meanwhile, UBS analysts have projected a slowdown in cloud infrastructure spending, which could affect Amazon, Microsoft (NASDAQ:MSFT), and Google (NASDAQ:GOOGL)’s financial performance. However, they noted that robust growth in AI spending could offset some of these impacts. In another development, Tesla (NASDAQ:TSLA) and Apple shares (NASDAQ:AAPL) saw significant increases in premarket trading, with Tesla rising by 5.7% following Elon Musk’s announcement of reduced involvement with the US government. Similarly, Apple’s shares increased by 2.7% after President Trump indicated that tariffs on China might decrease, potentially benefiting the company’s supply chain.

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