Raymond James lifts Amazon stock price target to $275

On Friday, Raymond (NSE:RYMD) James analyst Josh Beck increased the price target for Amazon.com (NASDAQ:AMZN) to $275 from $260, while reiterating a Strong Buy rating on the company’s shares. The new target aligns with the broader analyst consensus, as InvestingPro data shows analyst targets ranging from $211 to $306. Beck’s optimistic stance is based on the performance of Amazon Web Services (AWS) and its AI business, which is showing rapid growth despite current constraints. The company’s stock is currently trading near its 52-week high of $242.52, having delivered an impressive 46.73% return over the past six months.

Beck highlighted that AWS’s AI segment, particularly its GenAI project, is demonstrating robust expansion, with a multi-billion dollar run-rate business growing at triple digits. According to Raymond James estimates, AWS’s AI business is generating approximately $3.5 billion at a 200% growth rate. This is based on around 150,000 Hoppers operating at 65% utilization, contributing hundreds of millions from Bedrock RSAs every quarter. This growth contributes to Amazon’s overall strong financial health, which InvestingPro rates as GREAT with a score of 3.16. Beck noted that the growth is currently limited by chip and power availability but anticipates these constraints will ease in the second half of the year, potentially leading to an acceleration in growth.

The analyst’s positive outlook is further supported by cloud checks indicating that Bedrock is gaining deeper market traction, with high growth and strong customer support. Beck’s increased price target to $275 reflects around 12 times the projected 2027 enterprise value to EBITDA (EV/EBITDA) ratio. He maintains a recommendation for investors to buy Amazon shares, especially on any pullbacks.

Beck also summarized Amazon’s recent financial performance, noting that the company’s headline metrics surpassed expectations with an operating profit approximately $4 billion ahead of the trailing four-quarter average. The company’s robust performance is reflected in its impressive financial metrics, with total revenue reaching $620.13 billion and EBITDA of $111.58 billion in the last twelve months. However, the revenue guidance was slightly below expectations due to foreign exchange impacts, and operating income was at the high end of the Street’s predictions. Key AWS metrics were roughly in line with expectations at $28.8 billion, although there was anticipation for slightly higher figures. For deeper insights into Amazon’s financials and growth prospects, investors can access comprehensive analysis through InvestingPro’s detailed research reports, available for over 1,400 top US stocks.

Finally, Beck mentioned that constraints related to third-party and first-party chips, power, and motherboards are expected to improve in the second half of the year, which could delay a potential acceleration in growth and has been weighing on Amazon’s shares.

In other recent news, Amazon.com Inc. has been the focus of several analyst firms’ reviews. Cantor Fitzgerald maintained an Overweight rating on Amazon, highlighting the company’s robust core business and potential for margin growth, despite a substantial capital expenditure forecast of around $105 billion for fiscal year 2026. Redburn-Atlantic reiterated a Buy rating for Amazon, emphasizing the company’s competent management of overcapacity issues and effective response to demand signals.

RBC Capital Markets raised Amazon’s price target from $255.00 to $265.00, noting strength in Amazon Web Services (AWS) and continued outperformance in earnings before interest and taxes (EBIT). Another note from Cantor Fitzgerald confirmed its positive stance on Amazon, with an Overweight rating and a price target of $270.00, pointing out Amazon’s strong fundamentals and potential for margin expansion in the retail sector.

Lastly, Telsey Advisory Group reiterated its Outperform rating and $275.00 price target for Amazon. The firm praised Amazon’s Q4 2024 performance and Q1 2025 guidance, noting that sales growth was slightly below expectations due to the Leap Year effect and unfavorable foreign exchange rates, while operating income met projections. All these recent developments indicate a positive outlook from analysts regarding Amazon’s financial health and business strategy.

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