Amazon Stock Drops on Mixed Q1 Guidance, Massive Capex Pledge
Key Findings:
* Amazon.com, Inc. (AMZN) shares fell 3% premarket on mixed first-quarter guidance.
* Revenue guidance missed analyst estimates due to $2.1 billion hit from currency fluctuations.
* Company announced $104 billion in capital expenditures for 2025, exceeding forecasts.
* Strong performance in Amazon Web Services (AWS), with three consecutive quarters of 19% sales growth and operating profit margin of 46.9%.
Analyst Insights:
* Pivotal Research: Reiterated Buy rating and $260 price target, citing strong organic revenue growth opportunities, especially in AWS.
* DA Davidson: Maintained Buy rating and increased price target to $280, emphasizing AWS's health and potential for accelerated growth in the second half of 2025.
* JPMorgan: Emphasized Amazon's view of AI as a major opportunity and its substantial infrastructure investment as a competitive advantage.
* Wedbush: Retained Outperform rating and $280 price target, highlighting potential catalysts such as AI contributions to AWS growth and cost optimizations through robotics.
Key Reasons for Market Optimism:
* Expected reacceleration in AWS sales in the second half of 2025.
* Positive quarterly performance, including consecutive quarters of accelerated sales growth in physical stores.
* Record-high quarterly operating income of $21.2 billion.
Disclaimer:
The information provided in this report is for informational purposes only and should not be construed as investment advice. Individual investors should consult with a qualified financial advisor before making investment decisions.