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On Thursday, Citi reaffirmed its positive stance on Amazon.com, Inc. (NASDAQ:AMZN), maintaining a Buy rating and a $273.00 price target for the company’s shares. The endorsement follows the recent unveiling of Amazon’s Alexa+ AI Assistant, which has been integrated into the Amazon Prime service and is accessible to approximately 76 million Alexa device users in the United States, according to data from eMarketer. According to InvestingPro data, Amazon’s current market capitalization stands at $2.27 trillion, with the stock trading slightly below its Fair Value.
The introduction of Alexa+ is anticipated to significantly boost the adoption of GenAI Agentic applications, positioning Amazon at the forefront of this technological evolution. The analyst noted that the broader landscape of GenAI agents is changing the way users engage with applications, conduct searches, consume content, shop for goods, book travel, and interact with the internet, with competition intensifying in this space.
Citi’s analysis highlighted that other major players in the field include MetaAI with 700 million monthly active users (MAUs), ChatGPT with 400 million weekly active users (WAUs), Apple (NASDAQ:AAPL)’s Siri with embedded intelligence, and the growing use of Gemini2. The analyst emphasized that user engagement with Alexa increased by 20% year over year in 2024 across the more than 600 million Alexa-enabled devices sold to date.
The expectation is that Alexa+ will enhance user engagement and transaction activity. Given these factors, Citi has reiterated Amazon as a top pick in the market and stands by its $273 price target for the company’s stock. This aligns with the broader analyst consensus, as InvestingPro data indicates a strongly bullish outlook with price targets ranging from $207 to $306.
In other recent news, Amazon has announced the launch of Alexa+, an upgraded version of its voice assistant featuring generative artificial intelligence. This development aims to enhance user interaction by making Alexa more conversational and capable of handling multiple prompts. Additionally, Truist Securities has maintained its Buy rating for Amazon, setting a price target of $265, citing positive North American revenue trends and the potential revenue boost from the new AI-powered Alexa devices. Cantor Fitzgerald also reaffirmed an Overweight rating for Amazon, with a $270 price target, highlighting Anthropic’s potential impact on Amazon Web Services (AWS) revenue. Anthropic, backed by Amazon, recently launched an advanced AI model, which could contribute significantly to AWS’s revenue in the coming years.
TD Cowen reiterated a Buy rating and a $265 target for Amazon, focusing on AWS’s anticipated growth in generative AI revenue and related capital expenditures. The firm projects AWS’s GenAI revenue to rise substantially, contributing significantly to Amazon’s overall revenue by 2030. The analysts estimate AWS’s capex will increase notably, driven by the demand for AI infrastructure. These developments underscore Amazon’s strategic investments in AI and cloud computing, which are expected to shape its future revenue streams.
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