UBS cuts Amazon stock price target to $249, maintains buy

On Friday, UBS analyst Stephen Ju adjusted the price target for Amazon.com (NASDAQ:AMZN) stock to $249 from the previous $253, while reaffirming a Buy rating on the company’s shares. With a current market capitalization of $2.04 trillion and analyst targets ranging from $195 to $287, InvestingPro data suggests Amazon is currently trading near its Fair Value. Ju’s analysis suggests that the guidance for the second quarter of 2025 anticipates an approximate 5% growth in foreign exchange-neutral gross merchandise volume (GMV). He noted that despite concerns of further demand reduction due to consumer reaction to new tariffs, the current deceleration seems to have already accounted for potential downside risks.

Ju indicated that the e-commerce sector’s estimates are likely reaching a low point, signaling what he considers a tactical buying opportunity for Amazon’s stock. The company’s strong financial health is reflected in its Good overall score on InvestingPro, with revenue growing 11% over the last twelve months to $638 billion. He also mentioned that Amazon has reported easing capacity constraints and the ability to immediately sell new compute capacity, which could lead to an acceleration in the growth rate of Amazon Web Services (AWS) in the second half of 2025.

The analyst underscored the long-term growth prospects for Amazon, citing the continued adoption of e-commerce and the shift from on-premise computing to the cloud. Both sectors are at substantial levels of adoption, with e-commerce and the on-premise-to-cloud transition at 20% and 15%, respectively. As a prominent player in the Broadline Retail industry, Amazon shows strong profitability metrics with a gross margin of 49%. For deeper insights into Amazon’s growth potential and comprehensive analysis, check out the exclusive Pro Research Report available on InvestingPro. Ju believes these trends present significant opportunities for Amazon and AWS to grow substantially beyond their current sizes.

Despite a slight adjustment to free cash flow (FCF) estimates for 2026 and 2027, which changed by 1% and -4% respectively, Ju’s outlook for Amazon remains positive. The revised price target of $249 reflects these minor adjustments, but the Buy rating stands, signaling confidence in the company’s future performance.

In other recent news, Amazon reported first-quarter earnings that exceeded expectations, with revenue and operating income surpassing guidance. The company’s cloud computing division, Amazon Web Services (AWS), played a significant role in this achievement, showing a 17% growth, although slightly below some expectations. Analysts from firms such as Benchmark, JPMorgan, and Cantor Fitzgerald maintained positive ratings on Amazon, with price targets ranging from $225 to $260, reflecting confidence in the company’s resilience amidst macroeconomic challenges.

Susquehanna, while maintaining a positive outlook, lowered its price target to $225, citing operating income guidance that fell short of expectations. The firm noted a 10% year-over-year revenue growth for Amazon, with strong performance in its advertising segment. JMP Securities increased its price target to $250, highlighting Amazon’s solid results and the impressive performance of AWS’s operating income margin.

Amazon’s strategic focus on essentials and competitive pricing continues to be emphasized by analysts as a means to gain market share. The company’s guidance for second-quarter revenue growth suggests some acceleration, despite uncertainties related to tariffs. Overall, analysts remain optimistic about Amazon’s long-term growth potential, driven by its robust e-commerce, cloud, and advertising businesses.

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