Amazon is rocketing higher after it posted a third-quarter earnings beat , and analysts think there’s even more upside. The company earned $1.95 per share on $180.27 billion in revenue. Analysts polled by LSEG had penciled in earnings of $1.57 on revenue of $177.8 billion. One key metric for the company also came in hot: revenue for its Amazon Web Services cloud unit. That came in at $33 billion versus the StreetAccount estimate of $32.42 billion, marking a 20.2% acceleration during the quarter. Analysts had anticipated just 18.1%. Cloud growth has been a widely watched metric for the company as rivals such as Google and Microsoft ramp up the pressure. But Amazon CEO Andy Jassy appeared unfazed, saying that AWS is “growing at a pace we haven’t seen since 2022” thanks to robust artificial intelligence demand. Shares of Amazon popped 13% on Friday morning thanks to the report. Wall Street analysts remained bullish across the board, with the ones highlighted below raising their price targets. They also pointed to Amazon’s Trainium chips built for AI training as a particularly bright spot on the report. Here’s what they had to say. Goldman Sachs: buy rating, price target to $290 from $275 Goldman Sach’s target implies about 30% upside from Thursday’s close. “Over the short-term, we expect that the investor debates might shift from the characterization of AWS against the AI field toward increased scrutiny of the current consumer environment ( & any changed behavior) in the coming quarters. Over the long-term, we remain constructive on AMZN shares (even on the back of a +13% after-hours stock reaction) and reiterate our view that Amazon can produce a strong mix of compounded revenue growth and operating margin expansion on a multi-year horizon while continuing to make critical investments in long-term growth initiatives.” Barclays: overweight, target to $300 from $275 Barclays’ forecast corresponds to upside of around 35%. “Despite playing a bit of catch up, AWS has secured significant AI capacity over the next several years. The company’s custom silicon strategy appears to be off to a solid start with Trainium. We expect growth to accelerate from here.” Bank of America: buy, target to $303 from $272 Bank of America’s target calls for 36% upside going forward. “Results suggest ramping AWS capacity can drive growth, and commentary suggests Trainium is, indeed, seeing strong demand. We think capacity outlook commentary will support optimism on AWS upside, while re:Invent will be an opportunity to showcase key advances with Trainium, Nova, and potentially new partners. Also, eCommerce strength continues with Amazon retail taking share.” JPMorgan: overweight, target to $305 from $265 Analyst Doug Anmuth’s forecast is 37% above Amazon’s Thursday closing price. “We believe AMZN very effectively pushed back on many of the Street’s major AWS concerns on the earnings call, and combined w/better-than-expected revenue acceleration to 20% in 3Q, effectively flipped the script on the AWS narrative heading into 2026. … We believe overall sentiment on AWS will improve notably in coming months as the business accelerates growth and proves out the benefits of its full stack AI approach.” UBS: buy, target to $310 from $279 Analyst Stephen Ju’s price target was approximately 39% higher than Amazon’s closing price on Thursday. “We have for some time characterized AMZN shares as a coiled spring as investors have waited for higher revenue proof points from its heavy investments. AWS’s acceleration to 20% YOY growth during 3Q25 is the loudest signal yet. …Further, the disclosure that: 1) Anthropic is training Claude on 500k to going on 1M Trainium2 chips by end of year, as well as 2) demand for Trainium3 being strong, should break the narrative that Amazon’s ASICs are somehow not fit for purpose. And the availability of NVIDIA’s Grace Blackwell chips within AWS’s new UltraServers should dispel the notion that Amazon does not have access to GPUs.” Morgan Stanley: overweight, target to $315 from $300 Morgan Stanley’s target equates to 41% upside. “AWS accelerated and we detail 4 reasons why even faster growth is ahead (near-term capacity growth, doubling GW capacity next 2 years, a surging backlog and innovation). Retail top-line and EBIT delivered too, as ’26/’27 EPS rises by 5%/6%. PT to $315. AMZN Top Pick.” Citi: buy, target to $320 from $270 Analyst Ronald Josey’s price target implies upside of 44%. “With an incremental 3.8 GW of power added TTM, plans to add an additional 1 GW in 4Q, and Phase 1 of Project Rainier now live, AWS revenue growth reaccelerated to +20% Y/Y in 3Q. And given demand and strength of its October backlog, we believe AWS revenue growth can continue to accelerate in 4Q and into 2026. …Key here, OI—after adjusting for its FTC settlement and severance costs—came in ~6% above the high-end of guidance on efficiencies across Retail and AWS. Amazon remains a top-pick across the Internet sector.”
First Appeared on
Source link
