JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
Thursday, January 30, 2025 - JMP Securities has maintained a Market Outperform rating on Amazon.com (NASDAQ:AMZN) with a steady price target of $285.00. According to InvestingPro data, Amazon maintains a GREAT financial health score, with trailing twelve-month revenue reaching $620.13 billion. As a prominent player in the Broadline Retail industry, Amazon’s stock has shown strong momentum, trading near its 52-week high of $241.77. The affirmation comes as Microsoft (NASDAQ:MSFT)’s Intelligent Cloud segment reported growth slightly below consensus, with Azure and other cloud services increasing by 31% year-over-year on a constant currency basis. This figure was at the lower end of Microsoft’s guidance and just shy of the 32% growth anticipated by analysts.
Microsoft’s Azure and other cloud services’ growth for the upcoming quarter also appeared softer than expected, despite the company’s AI business demonstrating robust performance, boasting a 175% year-over-year increase and surpassing a $13 billion annual run rate. However, Microsoft also highlighted ongoing capacity constraints within its operations.
In light of Microsoft’s results, JMP Securities analyst Nicholas Jones commented on the potential impact on Amazon’s cloud service, AWS. The analyst suggested that buy-side expectations for AWS’s year-over-year constant currency growth may now be adjusted to 18%-19%, a slight decrease from the previous 19%-20% forecasted before Microsoft’s earnings release. Additionally, for the first quarter of 2025, investors might anticipate AWS growth guidance to be in the range of 18.5%-19% year-over-year on a constant currency basis, down from the over 19.5% expected prior to Microsoft’s announcement.
The outlook for Amazon’s AWS reflects a broader sentiment among investors, who were hoping for stronger results and guidance from Microsoft. The recalibration of expectations for AWS’s performance is now a focal point as Amazon approaches its earnings report next week. InvestingPro analysis shows Amazon’s revenue growing at 11.93% year-over-year, with 16 additional ProTips and comprehensive metrics available to subscribers through the Pro Research Report, offering deeper insights into Amazon’s growth trajectory and market position. Despite these adjustments, JMP Securities upholds its positive stance on Amazon, basing its $285 price target on a 16x enterprise value to estimated 2026 EBITDA multiple. While Amazon currently trades at a P/E ratio of 49.6, InvestingPro’s Fair Value analysis suggests the stock is slightly overvalued at current levels, though the company maintains strong fundamentals with an impressive $111.58 billion in EBITDA for the last twelve months.
In other recent news, Amazon.com has been the subject of several noteworthy developments. The company has maintained its Market Outperform rating and a $285.00 price target, according to JMP Securities. Analysts from the firm have adjusted their growth expectations for Amazon’s cloud division, Amazon Web Services (AWS), following Microsoft’s recent cloud segment results. Meanwhile, Amazon is facing a lawsuit alleging covert tracking of consumer movements via mobile devices, using a piece of code known as Amazon Ads SDK.
Amazon has also 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. In addition, the UK’s competition watchdog, the Competition and Markets Authority (CMA), is considering an investigation into AWS over concerns of reduced competition in the UK cloud services market.
Finally, Amazon’s pricing policies have been questioned amidst the U.S. Federal Trade Commission’s scrutiny of Pinduoduo (NASDAQ:PDD)’s online marketplace, Temu. These are the recent developments that investors should be aware of.
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