Wall Street analysts shared positive assessments on marketplace and cloud giant Amazon after a lackluster report - contrary to the selloff in the stock that investors staged. Some experts raised their target price on Amazon's securities, saying they looked attractive given Friday's drop. Others saw the company's investments in artificial intelligence as a potential catalyst for the stock's growth. In its second-quarter report, Amazon beat Wall Street forecasts for earnings and revenue, but investors were disappointed by a weak outlook for the current period. 

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- Goldman Sachs analyst Eric Sheridan raised his target price on Amazon's securities from $220 to $240 and maintained a "buy" rating, reports CNBC. Sheridan's new target suggests the company's stock price will rise another 12% or so from its current price. "Despite short-term debates about consumer demand, duties and [cloud division] AWS, we remain positive on Amazon stock. We believe the company is able to combine solid revenue growth and margin expansion over the long term while continuing to invest in strategic areas," Sheridan said.

- JPMorgan also raised its target price - from $255 to $265 - and reiterated an Overweight rating ("above market"), equivalent to a buy advice. "Amazon performed well overall, with sales growth accelerating to 12% on a currency-adjusted basis and operating income up 31% (11.4% margin) - both beating forecasts and expectations. The retail division stood out, with Amazon coping well with the first effects of duties: we see no signs of weaker consumer demand or higher prices. We continue to expect AWS growth to improve in the second half of the year -  up 18.5% in the third quarter and 19% in the fourth quarter," the investment bank said (quoted by CNBC).

- Analyst Citi raised its target from $265 to $270 per share (+26% to the current price) and maintained a "buy" rating. According to the investment bank, after Amazon's second-quarter results, investors' main focus may be on the fact that AWS is lagging behind rivals Microsoft Azure and Google Cloud in terms of growth: their revenue accelerated, while AWS's remained flat at 17% year-over-year. However, AWS new contract growth reached 24.5%, indicating continued strong demand, Citi added. "We believe the AWS constraints are temporary, with retail continuing to gain market share, [...] and recommend taking advantage of the potential drawdown," the bank said.

- UBS maintained a "buy" rating and $271 target price. Analyst Steven Ju called Amazon's $150 billion decline in market capitalization after the quarterly report "excessive." "We recognize that part of the decline in Amazon's stock was due to a lack of clear evidence of accelerating revenue growth despite rising budgets for AWS. Nevertheless, we continue to view Amazon as a compressed spring and maintain a buy recommendation on the stock's drawdown," said Ju.

- Bank of America also maintained a "buy" rating, but raised its target price to $272 from $265. "Retail is benefiting from improvements in speed and efficiency (delivery cost per unit is down year-over-year and quarter-over-quarter). AWS lost ground to Azure in Q2, but growth in the cloud may be uneven. While AWS is not yet directly benefiting from ChatGPT, broader adoption of generative AI in the enterprise sector remains a growth driver," BofA analysts said in a note cited by CNBC.

- Barclays reiterated an Overweight rating and raised its target price to $275 from $240. Investment bank analyst Ross Sandler's new target is 28% above Amazon's current price target. "Nearly all metrics in Amazon's retail business accelerated in the second quarter, but we're still waiting for AWS to assert itself through AI load growth. Sentiment about the second half of the year looks positive, but not surprisingly, the stock has sagged," the analyst wrote.

- Deutsche Bank also maintained a "buy" rating and raised its target price to $278 from $266. The investment bank analyst pointed out that the retailer is capturing more market share in e-commerce, and Amazon's advertising revenue accelerated in the second quarter. "We expect operating profit growth of 12.5% on average from 2024 to 2027. We believe the current decline in the stock is a great buying opportunity," the Deutsche Bank analyst emphasized. According to him, generative AI is accelerating the transition to the digital economy and opens up massive opportunities for infrastructure investments that could run into trillions of dollars over time. Amazon's cloud division is still leading the segment, and the current concerns about market share decline are likely temporary, Deutsche Bank added.

- Morgan Stanley reiterated an Overweight rating and $300 target price. "Retail and earnings growth clearly stand out and support the results. The investment bank indicated that Amazon shares remain their top pick as the company has shown strong earnings progress and AWS growth in the second quarter beat expectations.

This article was AI-translated and verified by a human editor

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