Amazon Stock Soars 15.2% as Analysts Race to Raise Targets

This article first appeared on GuruFocus.

Amazon (NASDAQ:AMZN), a global e-commerce and cloud-computing company, soared approximately 15.2% by Friday's close as analysts raised their price targets following stronger Amazon Web Services growth. AWS revenue increased 37% to approximately $42.2 billion, representing its fastest expansion in 18 quarters. At least 15 brokerages lifted their targets after the report, giving the rally an additional analyst catalyst beyond the initial earnings reaction.

Warning! GuruFocus has detected 3 Warning Sign with AMZN.

Is AMZN fairly valued? Test your thesis with our free DCF calculator.

JPMorgan raised its target to $365, citing AWS momentum and improving returns from Amazon's AI investments. Barclays also increased its objective to $365 from $330 while maintaining an overweight rating. Bank of America (NYSE:BAC) lifted its target to $320 from $310 and retained a buy recommendation. The analyst actions followed total quarterly revenue of $200.6 billion and earnings of $5.75 per share, which included gains associated with Amazon's investment in Anthropic, an AI developer.

The $35 increase in Barclays' target represents approximately 10.6%, while Bank of America's target rose by $10, or about 3.2%. Analysts nevertheless must balance accelerating cloud growth against Amazon's $220 billion spending plan and negative $7.6 billion of trailing 12-month free cash flow. The stock's 15.2% advance indicates that investors placed greater immediate weight on AWS growth and reserved capacity. Future target changes may depend on whether Amazon converts its infrastructure investment into sustained cloud revenue while rebuilding free cash flow.