JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
On Thursday, JMP Securities maintained a bullish stance on Amazon.com (NASDAQ:AMZN), reiterating its Market Outperform rating and a $285.00 price target for the e-commerce giant’s shares. With a market capitalization of $2.5 trillion and an "GREAT" financial health score according to InvestingPro, Amazon continues to dominate the tech landscape. The firm’s analysts focused on the recent performance and future expectations for Amazon’s cloud division, Amazon Web Services (AWS), in light of Microsoft (NASDAQ:MSFT)’s Intelligent Cloud segment results.
Microsoft reported that Azure and other cloud services had a year-over-year growth of 31% in constant currency, which was at the lower end of their guidance and slightly under the anticipated 32%. The guidance for Azure’s growth also appeared weaker than expected. Despite the robust growth in Microsoft’s AI business, which saw a 175% year-over-year increase and exceeded a $13 billion annual run rate, the company highlighted ongoing capacity constraints.
The analysts at JMP Securities noted that these results from Microsoft might lead to adjusted expectations for AWS’s growth. The buy-side expectations for AWS are now believed to be around 18%-19% year-over-year in constant currency, a slight dip from the previous 19%-20%. This comes as Amazon’s overall revenue growth stands at 11.93% over the last twelve months. Furthermore, the first quarter of 2025 growth guidance for AWS is anticipated to be in the range of 18.5%-19% year-over-year in constant currency, adjusted down from over 19.5% before Microsoft’s announcement.
The commentary from JMP Securities suggests that investors were hoping for stronger results and guidance from Microsoft, and this sentiment is likely to temper expectations for AWS as Amazon approaches its earnings release next week. The comparison between AWS and Azure growth trends is a key factor for investors trying to gauge the potential performance of Amazon’s cloud services.
Amazon’s stock price target by JMP Securities remains unchanged despite these adjusted expectations, indicating confidence in the company’s overall performance and market position. The forthcoming earnings report, scheduled for February 6, will provide further insights into AWS’s growth trajectory and its impact on Amazon’s financial health. Trading at a P/E ratio of 49.6x, investors seeking deeper analysis can access comprehensive valuation metrics and expert insights through InvestingPro’s detailed Research Report, which offers a thorough examination of Amazon’s market position and growth prospects.
In other recent news, Amazon is facing a lawsuit alleging covert tracking of consumer movements via cellphones and monetizing the collected data. The class action lawsuit claims that Amazon used a piece of code, Amazon Ads SDK, to gather timestamped geolocation data from consumers’ phones without their knowledge or consent. In parallel, Amazon entered into a significant transaction agreement with Ranpak Holdings (NYSE:PACK) Corp., which includes the issuance of a warrant for Amazon to acquire up to 18,716,456 shares of Ranpak’s common stock.
Similarly, Amazon’s cloud service, Amazon Web Services (AWS), is under consideration for investigation by the UK’s competition watchdog, the Competition and Markets Authority (CMA), over concerns of reduced competition in the UK cloud services market. This development follows Pinduoduo (NASDAQ:PDD)’s stock dip amid FTC scrutiny of Temu’s pricing policies, in which Amazon’s pricing policies have also been questioned.
Cantor Fitzgerald analysts have highlighted Tesla (NASDAQ:TSLA)’s significant growth in energy storage deployment and anticipate further growth in Tesla’s Energy Storage business. They also maintain a positive outlook on the self-driving truck sector, considering Aurora to be one of the industry leaders. Meanwhile, Amazon’s Prime Video is shifting its strategic focus towards live sports broadcasting and targeted ad placements, aiming to meet corporate profit targets set by Amazon CEO Andy Jassy. These are the recent developments that investors should be aware of.
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