BUZZ-Street View: Amazon’s marketplace business momentum keeps analysts bullish
Amazon's Q3 sales forecast exceeds market estimates, but its AWS cloud unit fell short of expectations, leading to a 7% drop in premarket trading. Analysts remain optimistic, with J.P. Morgan, Pivotal Research, Canaccord Genuity, and RBC Capital Markets maintaining positive ratings and price targets ranging from $240 to $285, citing strengths in inventory management, organic revenue growth, and the importance of AWS growth for investor confidence.
Amazon.com (AMZN.O) forecast Q3 sales above market estimates, but failed to live up to lofty expectations for its Amazon Web Services (AWS) cloud computing unit after rivals handily beat Wall Street forecast
AWS reported a 17.5% increase in revenue to edge past expectations
AMZN tumbles 7% to $216.54 in premarket trading
GROWTH PACKED IN PRIME BOXES
J.P.Morgan (“overweight,” PT: $265) sees strategic balance of first-party and third-party inventory, Prime membership as store business strengths
Pivotal Research (“buy,” PT: $285) highlights Amazon’s deep moat, scale, and efficiency to drive organic revenue growth; expects high-margin AWS to grow to ~35% from 17% in revenue in 5 years
Canaccord Genuity (“buy,” PT: $280) notes positive trends in online stores, third-party seller services, and same-day and next-day delivery expansion to smaller cities and towns
RBC Capital Markets (“outperform,” PT: $240) emphasizes on sustained or even accelerated AWS growth as key to restoring investor confidence in capitalizing on AI; however, this was an uncharacteristic setback quarter that will take some time to recover
