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Investing.com - William Blair reiterated its Outperform rating on Amazon.com (NASDAQ:AMZN) stock on Monday, highlighting the company’s compelling valuation and competitive advantages. This aligns with the broader analyst sentiment, as InvestingPro data shows Amazon has a strong consensus recommendation of 1.3, with 16 analysts recently revising their earnings expectations upward.
The firm noted that Amazon is trading at 13.4 times its out-year adjusted EBITDA estimate, which it considers attractive given the strength of Amazon’s platform across AWS and other business segments. While Amazon’s current P/E ratio stands at 35.6, its PEG ratio of 0.67 suggests it may be trading at a low P/E relative to its near-term earnings growth.
William Blair pointed to AWS reacceleration as a positive factor, suggesting that many bearish arguments against the company have been addressed through execution.
The research firm also identified potential upside from Amazon’s advertising business, Kuiper satellite project, and other ventures that could contribute to profitability in 2026 and beyond.
William Blair acknowledged that the primary risk to Amazon remains a broader pullback in consumer spending, which would impact the core retail segment that supports other higher-value service businesses in marketing and logistics.
In other recent news, Amazon announced a multi-year strategic partnership with OpenAI, valued at $38 billion. This agreement involves Amazon Web Services (AWS) providing OpenAI with EC2 UltraServers to support and expand OpenAI’s artificial intelligence workloads. Analysts have responded positively to Amazon’s developments, with Wedbush raising its price target for the company to $340, maintaining an Outperform rating. Stifel also increased its price target to $295, highlighting Amazon Web Services’ 20% growth in the third quarter, which surpassed expectations and outpaced competitors.
Benchmark raised Amazon’s price target to $295, expressing confidence in the company’s business trajectory. UBS further adjusted Amazon’s price target to $310, citing AWS’s 20% year-over-year growth as a significant indicator of the returns from Amazon’s investments. Additionally, Cipher Mining signed a $5.5 billion lease agreement with AWS to provide space and power for AI workloads, set to begin in 2026. This agreement includes the delivery of 300 megawatts of capacity, enhancing AWS’s infrastructure for future AI applications. These developments underscore the increasing focus on AI and cloud services in Amazon’s strategic operations.
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