Stifel maintains Amazon stock Buy rating, $248 target

On Thursday, Stifel analysts reiterated their Buy rating and $248.00 price target for Amazon.com (NASDAQ:AMZN), following the company’s financial performance report. According to InvestingPro data, Amazon maintains a "GREAT" overall financial health score of 3.05/5, with particularly strong profitability metrics. The company, currently valued at over $2 trillion, appears slightly undervalued based on InvestingPro’s Fair Value analysis. Amazon reported net revenue of $155.7 billion, which represents an 8.6% increase year-over-year and is slightly above the expected $155.1 billion. The company’s operating income reached $18.4 billion, surpassing the predicted $17.5 billion, and boasting an 11.8% margin compared to the anticipated 11.3%. With trailing twelve-month revenue of $638 billion and a robust gross profit margin of 48.85%, Amazon continues to demonstrate strong operational efficiency. InvestingPro subscribers can access 10+ additional ProTips about Amazon’s valuation and market position.

Amazon’s revenue for the second quarter of 2025 is projected to be between $159 billion and $164 billion, marking a growth of 7.4% to 10.8% year-over-year, which contrasts with the consensus estimate of $161.2 billion. The operating income forecast for the same period is set at $13.0 billion to $17.5 billion, with a 9.4% margin at the midpoint, whereas the consensus was a more optimistic $17.6 billion with a 10.9% margin.

The company’s segment revenues also showed varied performance. Online Stores revenue came in at $57.4 billion, a 5.0% increase year-over-year, exceeding the consensus of $56.6 billion. Physical Stores revenue was slightly higher than expected, at $5.5 billion compared to the projected $5.4 billion. However, Third-party Seller Services revenue fell short of expectations, reporting $36.5 billion against the anticipated $36.8 billion.

Subscription services performed well, with revenue of $11.7 billion, which is a 9.3% year-over-year increase and higher than the consensus of $11.6 billion. Amazon Web Services (AWS) brought in $29.3 billion, just below the consensus of $29.4 billion, but AWS’s Operating Income of $11.5 billion exceeded expectations, with a 39.5% margin compared to the predicted 35.6%. The North America Operating Income was reported at $5.8 billion, slightly below the expected $6.1 billion, and International Operating Income was in line with expectations at $1.02 billion.

The second quarter guidance also accounts for an anticipated foreign exchange headwind of 10 basis points. Stifel’s reiteration of their Buy rating and price target aligns with the broader analyst consensus, as InvestingPro data shows a strong buy recommendation of 1.41 (on a scale where 1 is Strong Buy). With analyst targets ranging from $195 to $287, and comprehensive financial analysis available in InvestingPro’s detailed Research Report, investors can make more informed decisions about this prominent player in the Broadline Retail industry.

In other recent news, Amazon announced a significant investment of $4 billion to expand its delivery network across rural America, creating over 100,000 new jobs. This initiative aims to enhance delivery speeds and broaden product selection for customers in small towns. Amazon’s expansion will include over 200 new delivery stations, significantly increasing its capacity to handle more packages annually. Meanwhile, UBS has adjusted its price target for Amazon to $253, down from $272, while maintaining a Buy rating. The revision considers potential impacts from tariffs and recalibrated growth estimates for Amazon’s global merchandise volume and AWS segment.

Additionally, Amazon has been in discussions with former President Donald Trump regarding concerns about tariff-related pricing, which Amazon has denied implementing. In the competitive landscape, Mizuho (NYSE:MFG) Securities has maintained an Outperform rating for Chewy (NYSE:CHWY), despite Amazon’s entry into the pet pharmacy sector. Chewy is expected to continue thriving with its strategy of integrating physical veterinary clinics. In the tech sector, Microsoft (NASDAQ:MSFT) and Meta (NASDAQ:META) reported quarterly results exceeding expectations, boosting their stock performance, while Apple (NASDAQ:AAPL) faced a setback due to a court ruling on its App Store practices.

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