Amazon (AMZN, Financial) has been a leader in cloud computing, benefiting from significant profits alongside rivals like Microsoft and Google. However, the landscape is potentially shifting due to emerging competition from AI-focused cloud services and Nvidia, which is positioning itself as a substantial new player in the industry. Nvidia began offering its cloud-computing services two years ago and has been supporting new competitors, such as CoreWeave and Lambda, with significant investments.
While the direct impact on Amazon's cloud business has been minimal so far, the increase in computing demands driven by AI advancements could lead to a more competitive environment. As AI technology continues to grow in importance, the dynamics of the cloud-computing market might experience a more significant transformation, challenging established giants like Amazon.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 67 analysts, the average target price for Amazon.com Inc (AMZN, Financial) is $242.39 with a high estimate of $305.00 and a low estimate of $195.00. The average target implies an upside of 13.92% from the current price of $212.77. More detailed estimate data can be found on the Amazon.com Inc (AMZN) Forecast page.
Based on the consensus recommendation from 73 brokerage firms, Amazon.com Inc's (AMZN, Financial) average brokerage recommendation is currently 1.8, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Amazon.com Inc (AMZN, Financial) in one year is $187.89, suggesting a downside of 11.69% from the current price of $212.77. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Amazon.com Inc (AMZN) Summary page.
AMZN Key Business Developments
Release Date: May 01, 2025
- Revenue: $155.7 billion, up 10% year-over-year, excluding foreign exchange impact.
- Operating Income: $18.4 billion, up 20% year-over-year.
- Free Cash Flow: $25.9 billion trailing 12-month.
- North America Revenue: $92.9 billion, an increase of 8% year-over-year.
- International Revenue: $33.5 billion, an increase of 8% year-over-year, excluding foreign exchange.
- Advertising Revenue: $13.9 billion, growing 19% year-over-year.
- AWS Revenue: $29.3 billion, an increase of 17% year-over-year.
- AWS Annualized Revenue Run Rate: Over $117 billion.
- Net Income: $17.1 billion, includes a pretax gain of $3.3 billion from investment in Anthropic.
- Capital Expenditure: $24.3 billion in Q1, primarily for technology infrastructure and fulfillment network.
- Q2 Revenue Guidance: Expected between $159 billion and $164 billion.
- Q2 Operating Income Guidance: Expected between $13 billion and $17.5 billion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Amazon.com Inc (AMZN, Financial) reported a 10% year-over-year increase in revenue, reaching $155.7 billion, excluding the impact of foreign exchange rates.
- Operating income rose by 20% year-over-year to $18.4 billion, showcasing strong financial performance.
- Amazon Web Services (AWS) achieved a 17% year-over-year growth, reaching a $117 billion annualized revenue run rate.
- The company set new delivery speed records, delivering more items in the same day or next day than any other quarter in its history.
- Amazon's advertising revenue grew by 19% year-over-year, generating $13.9 billion, indicating strong growth in this segment.
Negative Points
- Amazon.com Inc (AMZN) faces uncertainty due to potential heightened tariffs, which could impact pricing and demand.
- The company recorded onetime charges related to historical customer returns and costs to receive inventory pulled forward due to anticipated tariffs.
- AWS capacity constraints are limiting the ability to capture more AI revenue, despite high demand.
- The macroeconomic environment remains complex, with uncertainties around consumer demand and global trade impacting future guidance.
- Stock-based compensation expenses are expected to increase in Q2, impacting operating income.
