Summary

  • Amazon announced its results for the second quarter of 2023, showcasing an 11% jump in its net sales during the quarter to US$134.4 billion.
  • Brokers upgraded their ratings on AMZN, based on the growth prospects visible in the company’s AWS segment.
  • As per EODHD/Others data, J.P. Morgan has given AMZN an ‘overweight’ rating and a price target of US$180.

On August 3, 2023, Amazon announced its earnings for the second quarter of 2023, showcasing an 11% jump in its net sales during the quarter to US$134.4 billion. Meanwhile, the company’s operating income increased to US$7.7 billion in Q2 2023, as compared to US$3.3 billion in Q2 2022.

Amazon’s AWS segment drove growth across the company, as the segment alone reported an operating income of US$5.4 billion during Q2 2023. The segment also saw a 12% y-o-y increase in sales to US$22.1 billion.

AMZN has a mean recommendation rating of 1.7 on a scale of one to five. Here, one represents a ‘strong buy’ rating and five represents ‘strong sell' rating. The stock’s mean consensus price target is US$165.36, an upside potential of 18.48% over Friday’s closing price.

The stock hit its 52-week high of US$146.57 almost a year back on August 16, 2022.

AMZN Price Chart; Image Source: AMZN EODHD/Others

Following the release of the results, AMZN rose 8.75% to US$140.19 during pre-market hours. The stock closed at US$139.57 on Friday, August 4, 2023.

What analysts are saying about AMZN

Following the release of the company’s results, both Cowen and Company and Credit Suisse upgraded AMZN to an ‘outperform’ rating on August 4, 2023.

Meanwhile, Evercore ISI, JMP Securities and Needham Securities retained a ‘moderate buy’ or ‘outperform’ rating on the stock. At the same time, Wedblush Securities upgraded AMZN to a ‘buy’ rating and increased its price target on the stock to US$170.

As per EODHD/Others data, a total of 55 brokers have covered the stock. Among these brokers, seventeen have given AMZN a ‘strong buy’ rating, thirty-six have given it a ‘buy’ rating, one analyst has given it a ‘hold’ rating and another analyst suggests AMZN is a ‘sell’.

Image source: ©2023 Kalkine®; Data source: EODHD/Others

EODHD/Others data suggests that SVB MoffettNathanson has given the highest price target on the stock of US$191, as on August 4, 2023. This marks an upside potential of 36.85% on AMZN’s closing price on August 5, 2023.

Atlantic Equities, which upgraded AMZN to ‘overweight’, stated that “non-advertising ecommerce business appears to be on a clear path to reach breakeven. Equity analyst RBC said that generative AI’s role in company’s capex is ‘significant’ and likely to grow.

Focus on AWS

Equity analysts have highlighted Amazon’s AWS segment, which has helped accelerate growth in the company. J.P. Morgan has given an ‘overweight’ rating on AMZN, with a price target of US$180 on it, as per EODHD/Others.

The broker has stated that Amazon Web Services has provided stability and growth alongside meaningful margin expansion in retail. The broker also stated that AWS has also led to a fall in company’s overall capex, driving free cash flow inflection in 2023.

Meanwhile, Evercore ISI believes that AWS could help Amazon increase its quarterly revenue at a faster pace than Microsoft’s Azure beginning in Q3. Additionally, Jeffries has given the stock a ‘buy’ rating, stating that AWS cost optimization headwinds are softening as customers shift focus to driving new workloads to the cloud.