Amazon Stock Dip on Mixed Guidance and Capital Expenditure Announcement

Key Points:

* Amazon (AMZN) shares declined 3% in premarket trading after releasing mixed first quarter guidance.
* The tech giant guided lower for first quarter revenue due to currency fluctuations.
* Amazon announced significant capital expenditures of $104 billion this year, exceeding analyst forecasts.
* Analysts remain bullish on Amazon due to expected sales acceleration in Amazon Web Services (AWS) and aggressive AI spending.

Market Activity:

* The company's ticker page was the most active on Yahoo Finance, ahead of Palantir (PLTR).

Financial Highlights:

* First quarter revenue guidance: $151-$155 billion (below analyst estimates of $158 billion)
* Capital expenditures: $104 billion (above analyst forecasts of $80-$85 billion)
* Highest quarterly operating income: $21.2 billion
* Three consecutive quarters of 19% AWS sales growth
* AWS operating profit margin: 46.9% (up from 29.6% last year)
* Accelerated sales growth in physical stores for the second consecutive quarter

Analyst Insights:

* Pivotal Research:
* Rating: Buy
* Price Target: $260
* Highlights potential for margin expansion and organic revenue growth driven by AWS and other segments.

* DA Davidson:
* Rating: Buy
* Price Target: $280
* Believes AWS is well-positioned as the leading hyperscaler, especially in AI-related services.

* JPMorgan:
* Rating: Overweight
* Price Target: $270
* Views GenAI as a major opportunity for Amazon, and capital expenditures support AWS's growth trajectory.

* Wedbush:
* Rating: Outperform
* Price Target: $280
* Identifies potential catalysts such as AI contribution to AWS growth, automation cost reductions, and monetization of Project Kuiper.