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Investing.com - HSBC maintained its Buy rating and $256.00 price target on Amazon.com (NASDAQ:AMZN) following the company’s second-quarter earnings report that exceeded analyst expectations. According to InvestingPro data, 18 analysts have recently revised their earnings estimates upward, with price targets ranging from $209 to $306, suggesting potential upside from current levels.
Amazon reported second-quarter net sales of $167.7 billion, representing a 13.3% year-over-year increase and beating consensus estimates of $162.2 billion by 3.4%. Operating income rose 30.6% year-over-year to $19.2 billion, surpassing consensus projections of $17.0 billion by 12.9%.
The company’s North America segment delivered particularly strong results, with operating income increasing 48.4% year-over-year to $5.8 billion, 29.3% above consensus estimates. The International division saw nearly fivefold growth in operating income to $1.5 billion, exceeding consensus by 180.5%.
AWS, Amazon’s cloud computing segment, underperformed expectations with operating income missing consensus by 6.6%. HSBC noted that both Amazon and Microsoft (NASDAQ:MSFT)’s recent results highlight increased investment requirements to support growth in cloud and AI, with Amazon well-positioned due to its leading share in the cloud market.
Capital expenditures for the quarter reached $32.2 billion, 25% higher than the consensus estimate of $25.6 billion, which HSBC believes "should now be considered the quarterly run-rate going forward." The company reported cash and cash equivalents of $61.5 billion, which HSBC described as "broadly in line after taking higher capex into account." For deeper insights into Amazon’s financial health and growth prospects, including exclusive ProTips and comprehensive valuation metrics, visit InvestingPro, where you’ll find detailed analysis in the Pro Research Report.
In other recent news, Amazon reported strong financial results for its latest earnings, with revenue reaching $168 billion and profit hitting $19.2 billion, surpassing analyst expectations of $162 billion and $17 billion, respectively. This performance was largely driven by growth in its retail segment, which saw a 12% increase year-over-year. In response to these results, BofA Securities increased its price target for Amazon to $272, up from $265, while maintaining a Buy rating. Barclays (LON:BARC) also raised its price target to $275, citing Amazon’s second-quarter performance and AI potential as key factors. DA Davidson adjusted its price target to $265 from $230, reflecting Amazon’s ability to exceed market expectations in revenue and profit.
Despite these positive financial results, Amazon’s cloud division, Amazon Web Services (AWS), reported a growth of 17% year-over-year, slightly below some investor expectations of 18%. UBS maintained its Buy rating and $271 price target, noting the market’s extreme reaction to the minor revenue miss. Additionally, Amazon announced it would close its Wondery podcast studio, resulting in 110 job cuts, and Wondery CEO Jen Sargent will depart as part of this restructuring. These developments highlight Amazon’s ongoing strategic adjustments and market performance.
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