DoD tests AI models that make it easy to switch from vendors like Palantir
On Wednesday, JPMorgan analysts increased the price target for Amazon.com stock (NASDAQ: NASDAQ:AMZN) to $240 from $225, maintaining an Overweight rating. Currently trading at $205.71, Amazon’s analyst targets range from $195 to $305, with InvestingPro data showing the company maintains a "GREAT" overall financial health score. The analysts highlighted Amazon’s strong position as a leader in e-commerce and public cloud services, noting the ongoing early-stage secular shifts in these markets.
The analysts pointed out that U.S. e-commerce accounts for approximately 20% of adjusted retail sales, while only about 10% of IT spending is currently in the cloud. They emphasized Amazon’s strategic advantage through its flexibility in managing first-party and third-party inventory and its Prime membership benefits.
Amazon Web Services (AWS) holds a 31% share of the global cloud market, according to the analysts. They believe Amazon is on track for multi-year margin expansion and an increase in free cash flow, targeting mid-single-digit percentage growth in North American operating margins.
The analysts also noted that Amazon’s high-growth AWS and advertising revenue streams are its most profitable sectors, further supporting margin expansion and free cash flow generation.
In other recent news, Amazon Pharmacy has introduced new features to simplify medication management for U.S. customers. These enhancements allow caregivers to manage medications for loved ones through their own accounts and expand access to PillPack for Medicare customers. Over 50 million Medicare Part D beneficiaries can now use their insurance for PillPack, which delivers pre-sorted medication packets. Meanwhile, German antitrust officials have scrutinized Amazon’s pricing tools, expressing concerns that they may violate competition law by limiting visibility of certain offers. Amazon has strongly disagreed with this assessment, emphasizing its commitment to competitive pricing. In the financial realm, BofA Securities has raised its price target for Amazon to $248, citing advancements in robotics and artificial intelligence. The analysts noted improvements in Amazon’s operational efficiency, predicting potential long-term margin growth. Additionally, Citizens JMP has maintained a Market Outperform rating for Amazon, highlighting its competitive strategies in the digital advertising space.
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