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On Friday, DA Davidson affirmed its commitment to a positive outlook on Amazon.com (NASDAQ:AMZN) shares, maintaining a Buy rating and a $230.00 price target. The endorsement comes after Amazon’s first-quarter earnings for 2025 surpassed forecasts for both revenue and earnings. The $2.04 trillion market cap company maintains a highly bullish analyst consensus, according to InvestingPro data. Despite the strong performance, the focus was drawn to a slowdown in the growth of Amazon Web Services (AWS), as reported by the company.
The technology giant’s earnings report indicated that AWS, a key driver of Amazon’s profitability, experienced a deceleration in growth compared to the previous quarter. With overall revenue growth at 11% and EBITDA reaching $120.47 billion, this shift was attributed to several factors, including the unpredictability of enterprise sales cycles and the occasional capacity constraints in AI-related services, as noted by Amazon’s management.
The maintained Buy rating suggests that DA Davidson sees continued value in Amazon’s stock, despite the challenges faced by AWS. The $230.00 price target remains unchanged, signaling confidence in the company’s long-term prospects.
Amazon’s broader financial health, as evidenced by the Q1 results, appears to remain robust, with the company beating expectations on critical financial metrics. The strong overall performance, however, was not enough to completely overshadow the concerns regarding AWS’s growth trajectory.
Investors and market watchers are likely to keep a close eye on Amazon’s strategies to address the growth deceleration in AWS. The company’s future performance will be closely monitored, especially in the areas of enterprise sales and AI service capacity, which are pivotal for AWS’s continued expansion. InvestingPro analysis shows Amazon maintains a "GOOD" overall financial health score, with additional insights available in the comprehensive Pro Research Report, which offers deep-dive analysis of 1,400+ top US stocks.
In other recent news, Amazon has reported solid financial results across its divisions, with a notable performance from Amazon Web Services (AWS). Benchmark analysts highlighted that Amazon’s latest earnings report met revenue expectations and exceeded operating income projections by nearly $1 billion, thanks to AWS’s strong performance. Meanwhile, JPMorgan noted that Amazon’s first-quarter revenue and operating income surpassed upper guidance limits, and AWS margins reached a new peak. Cantor Fitzgerald also reported that Amazon’s first-quarter earnings showed revenues aligning with expectations, and AWS experienced a 17% growth, although slightly below some buy-side expectations.
In terms of stock evaluations, UBS adjusted Amazon’s stock price target to $249, maintaining a Buy rating, while noting the easing of capacity constraints and potential growth in AWS. Benchmark also maintained a Buy rating with a $260 target, emphasizing Amazon’s market share gains and operational efficiencies. Susquehanna, despite lowering the price target to $225, maintained a positive outlook on Amazon’s long-term growth potential, driven by its e-commerce, cloud/AI, and advertising businesses. Cantor Fitzgerald raised the price target to $240, citing Amazon’s competitive positioning during macroeconomic disruptions. These developments reflect varied analyst perspectives on Amazon’s potential amidst macroeconomic challenges and tariff impacts.
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