US LNG exports surge but will buyers in China turn up?
On Monday, New Street Research updated its outlook on Amazon.com (NASDAQ:AMZN) shares, with analyst Dan Salmon increasing the price target to $280 from $234. The firm sustains its Buy rating for the online retail and cloud computing giant, which currently commands a market capitalization of $2.43 trillion. The revision reflects expectations of heightened long-term revenue and operating margin, especially contributed by Amazon Web Services (AWS). According to InvestingPro data, Amazon’s strong market position is supported by 11% revenue growth over the last twelve months.
Salmon emphasizes AWS as a key driver for Amazon’s future financial performance. The updated price target takes into account a combination of higher projected revenues and operating margins from AWS, although it also considers lowered near-term estimates alongside increased capital expenditures and decreased free cash flow. The analysis incorporates extended financial modeling through 2029. InvestingPro analysis reveals that while Amazon trades at a P/E ratio of 41.4, it maintains strong financial health with analysts projecting EPS growth to $6.36 in FY2025.
Amazon’s position as New Street Research’s Top Pick is reinforced by the belief that AWS’s revenue growth will become the primary focus for investors in 2025. This shift is anticipated after the current emphasis on the alignment of AWS with the growing retail profitability experienced in 2024. The analyst pointed to several potential catalysts that could further propel Amazon’s growth.
These catalysts include broader AWS engagements, particularly in artificial intelligence with Trainium2, a chip designed to train machine learning models. Additionally, other notable developments could include improvements to the Nova frontier model, updates on consumer general AI applications like Rufus, and the effects of general AI seller tools, such as dynamic backgrounds and advertising creative enhancements. These advancements are expected to contribute significantly to Amazon’s performance and investor narrative in the coming year. For deeper insights into Amazon’s AI initiatives and their potential impact on valuation, access the comprehensive Pro Research Report available exclusively on InvestingPro, along with 14 additional key investment tips for AMZN stock.
In other recent news, Amazon.com has been the focus of several significant developments. Mizuho (NYSE:MFG) Securities maintained its Outperform rating on the company’s stock, citing strong demand signals and potential for increased efficiency in Amazon’s retail segment. Phillip Securities, however, downgraded Amazon’s rating from Buy to Accumulate, while raising the price target from $240 to $270, following the company’s Q4 2024 performance.
Meanwhile, UBS adjusted the price target for Amazon.com stock slightly down to $272, maintaining a Buy rating. The revision followed Amazon’s preliminary capital expenditure forecast for 2025, which is projected to be around $100 billion.
On another note, Amazon MGM Studios is planning to establish an international theatrical distribution arm for its future feature films, according to sources familiar with the matter. This move will allow the studio to have direct control over the distribution of its films in international markets.
Lastly, Amazon faced a legal setback in Germany as Nokia (HE:NOKIA) secured an injunction against the company over a streaming patent infringement. Once Nokia provides the required deposit, Amazon will be compelled to cease its streaming service operations within the country. These are the recent developments involving Amazon.
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