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On Friday, Evercore ISI analysts revised their price target for Amazon.com (NASDAQ:AMZN) stock, lowering it to $260 from the previous $270, while retaining an Outperform rating. The adjustment follows Amazon’s first-quarter earnings report, which revealed a mix of achievements and challenges. According to InvestingPro data, Amazon currently trades at $190.20, with analysts’ targets ranging from $195 to $287, suggesting significant upside potential. The company maintains a "GOOD" overall financial health score, supported by strong profitability metrics.
The analysts noted that while Amazon’s earnings per share for the first quarter beat expectations, with the company reporting $5.53 in diluted EPS over the last twelve months, it provided softer operating income guidance for the second quarter. Additionally, Amazon Web Services (AWS) did not show the acceleration that was anticipated, especially in comparison to Microsoft (NASDAQ:MSFT) Azure’s robust performance. Despite these factors, Evercore ISI believes the fundamental investment thesis for Amazon remains strong. InvestingPro subscribers can access 8 additional key tips about Amazon’s valuation and growth prospects, along with comprehensive financial health analysis.
According to the analysts, Amazon’s second-quarter operating income will be affected by one-off costs associated with the Kuiper satellite project launch and the usual timing of annual compensation grants. However, they anticipate that AWS will gain momentum in the second half of the year as supply constraints ease and the company’s AI Cloud services continue to expand rapidly.
The report highlighted several key positive indicators, including a steady 10% year-over-year revenue growth and record operating margins for Amazon overall and across all segments. This growth is confirmed by InvestingPro data, showing a 10.99% revenue growth rate and an impressive 48.85% gross profit margin. AWS maintained a consistent revenue growth rate of 17% year-over-year, with backlog growth accelerating to 20%, signaling positive future prospects. The company’s robust financial position is further evidenced by its moderate debt levels and strong cash flows, as highlighted in InvestingPro’s detailed financial health analysis. Additionally, Amazon’s retail segment has not yet observed any indications of a slowdown in consumer spending. The analysts also pointed out that the operating margins in each segment suggest ongoing and sustainable cost efficiencies.
The revised price target of $260 implies a 40% upside potential for Amazon stock from its current level, indicating Evercore ISI’s confidence in the company’s long-term growth despite near-term headwinds.
In other recent news, Amazon.com has been the focus of several analyst reports following its first-quarter earnings for 2025. The company reported that its revenue and operating income slightly exceeded the upper end of its guidance, with Amazon Web Services (AWS) achieving a 17% year-over-year revenue growth. However, North American profitability fell short of forecasts, and the outlook for second-quarter operating income was weaker than expected. Analysts from Goldman Sachs, Stifel, BofA Securities, and Morgan Stanley (NYSE:MS) have all maintained a positive stance on Amazon, with price targets ranging from $220 to $250.
Goldman Sachs reaffirmed a Buy rating with a $220 price target, citing Amazon’s ability to deliver revenue growth and margin expansion. Stifel maintained a Buy rating but adjusted its price target slightly to $245, noting that AWS growth was below expectations but remained optimistic about Amazon’s overall performance. BofA Securities raised its price target to $230, highlighting the potential for growth if trade agreements materialize. Morgan Stanley maintained an Overweight rating with a $250 price target, expressing confidence in Amazon’s retail market share gains but cautioning about the uncertainties related to China tariffs.
Additionally, Amazon’s shares experienced a drop in premarket trading due to a weaker-than-expected outlook for operating income and potential challenges in the upcoming months. Despite these concerns, analysts remain optimistic about Amazon’s long-term growth prospects, particularly in the AWS segment and retail market.
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