Amazon Outlook: What Analysts Are Saying About AMZN Stock Now
Experts’ opinions shouldn’t be treated as gospel, but they can help investors make sense of the data that’s available. In the case of Amazon (NASDAQ:AMZN), analysts on Wall Street are generally bullish and envision higher prices for AMZN stock. If you agree with their assessment, you could decide to take a share position in Amazon right now.
Amazon has certainly expanded beyond its origin as an e-commerce company. The company’s cloud computing business, Amazon Web Services (AWS), is quite popular and lucrative. Plus, Amazon is preparing to launch internet satellites into space during 2024’s first six months.
There may be a disconnect between how general investors and Wall Street analysts feel about Amazon’s future prospects. That’s perfectly fine, as you can see what the experts have to say about Amazon, and then decide for yourself whether the shares are worth owning in 2023.
Analyst Acknowledges AWS Issues But Is Bullish on AMZN Stock
JPMorgan Chase analyst Doug Anmuth is in the bull camp, with a $135 price target and an “overweight” rating on AMZN stock. Anmuth observes that “investor sentiment” surrounding Amazon “is near multi-year lows.” This suggests that financial traders might consider a contrarian position in the stock.
Anmuth acknowledges that Amazon has issues, however. For example, AWS has experienced “revenue growth deceleration.” Indeed, year-over-year (YOY) revenue growth for AWS declined from 37% in 2022’s first quarter to 20% in 2022’s fourth quarter.
However, 20% revenue acceleration is nothing to sneeze at. In any case, Anmuth sees Amazon’s “AWS deceleration” as “macro-driven, and our conversations with select large cloud spenders suggest willingness to re-accelerate spending in a better environment.” Thus, investors might anticipate improvement in AWS’s upcoming revenue growth stats.
Amazon Prime Could Provide ‘Exceptional Value’
Meanwhile, Bernstein analyst Mark Shmulik doesn’t seem very enthused about AWS’s performance but still remains bullish on AMZN stock. He reiterated his “outperform” rating on the stock and gave it a $125 price target. Shmulik commented, “If/when we do get that clean EBIT beat, the stock should react strongly. For now AWS is the issue, not retail.”
In contrast, William Blair analyst Dylan Carden appears to have a favorable outlook on AWS. He believes AWS “ultimately benefits from the current cost-conscious environment and will see acceleration later in the year from new customer adoption.”
Along with that, Carden indicates a favorable view of Amazon’s Prime service. “[E]ven before accounting for more recent additions, Prime offers exceptional value, equal to roughly 2.5 times the current annual cost to the consumer,” the analyst calculates.
So, Is it Time to Buy AMZN Stock?
Amazingly, out of 38 Wall Street analyst ratings on Amazon, 37 of them are “buy” (or the equivalent of “buy”). Furthermore, the analyst consensus price target of $136.86 implies significant share-price upside potential.
I fully agree with the consensus opinion and am strongly optimistic. Retail investors might be worried about technology businesses in general and Amazon in particular, but the company remains a powerful competitor in e-commerce and retail, as well as in cloud computing. Therefore, I can say with confidence that this is a great time to consider buying AMZN stock.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
