DA Davidson lifts Amazon stock target to $280, keeps buy rating

On Friday, DA Davidson analysts increased their price target on Amazon.com shares (NASDAQ:AMZN) to $280, up from the previous $235, while maintaining a Buy rating on the tech giant’s stock. With a current market capitalization of $2.51 trillion and trading near its 52-week high, Amazon’s stock has shown remarkable momentum, gaining over 46% in the past six months. The revision follows Amazon’s recent earnings report, which revealed an uptick in Retail profitability and consistent growth in Amazon Web Services (AWS), despite facing challenges from unfavorable foreign exchange rates. According to InvestingPro analysis, Amazon currently appears to be trading slightly above its Fair Value.

The analysts highlighted the impressive performance of Amazon’s Retail sector and the robust expansion of AWS. According to DA Davidson, the earnings results demonstrated Amazon’s ability to improve profitability in its Retail division while continuing to grow its cloud services business. This growth comes even as the company navigates through the headwinds posed by currency fluctuations, which have impacted many multinational companies. The company’s overall revenue grew by 11.93% in the last twelve months, with InvestingPro data showing strong financial health metrics and robust cash flows sufficient to cover interest payments.

DA Davidson’s analysis also pointed to positive management commentary about AWS. The company’s executives have indicated ongoing growth in both AI and non-AI services. Moreover, the analysts noted an acceleration in cloud migrations, as customers are increasingly pursuing new AI initiatives. This trend suggests that Amazon’s cloud business remains a key driver of its overall growth trajectory.

The raised price target reflects the analysts’ confidence in Amazon’s future performance, backed by the strong earnings and the potential for continued expansion in both its Retail and AWS segments. The Buy rating reaffirms DA Davidson’s positive outlook on Amazon stock, suggesting that the analysts see the company’s shares as a worthwhile investment.

Amazon’s latest financial results and the subsequent price target increase by DA Davidson underscore the company’s resilience and adaptability in a dynamic market landscape. Amazon’s ability to sustain growth across its diverse business units continues to solidify its position as a leading player in both the retail and cloud computing industries.

In other recent news, Amazon.com has been the subject of several developments. Piper Sandler and Benchmark both raised their price targets for Amazon, citing the company’s strong fourth-quarter results and the potential for long-term growth. Amazon’s fourth-quarter earnings before interest and taxes (EBIT) reached $21.2 billion, surpassing its guidance of $20 billion. However, the company’s first-quarter guidance for 2025 projected revenues between $151 and $155 billion, slightly lower than Street expectations.

Amazon is also preparing to launch a generative artificial intelligence (AI) overhaul of its Alexa voice service, marking a significant update to the product. The new AI service will have the ability to respond to multiple prompts in a sequence, potentially functioning as an "agent" for users by performing tasks without their direct input.

In a strategic partnership, Amazon Web Services (AWS) and Bouygues (EPA:BOUY) group have announced their intention to accelerate digital transformation across Bouygues’ operations. The partnership will utilize AI to enhance operations, enable faster growth, and launch innovative services.

However, Amazon is facing legal action from the Federation of National Trade Unions following the closure of all seven of its warehouses in Quebec, Canada, resulting in over 1,900 layoffs. The union is seeking to cancel the layoffs and mandate the reopening of the warehouses, in addition to seeking compensation and damages for the affected employees. These are just some of the recent developments involving Amazon.

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