"Amazon.com. Inc (NASDAQ: AMZN) is showing strong momentum in its core retail business and significant underlying growth in its Amazon Web Services (AWS) cloud division, driven by accelerating demand for its artificial intelligence services. A healthy retail division, accelerating AI demand within its cloud unit, and a rapidly expanding advertising business are positioning Amazon for continued growth and improved profitability. Wedbush analyst Scott Devitt reaffirmed his Outperform rating on Amazon and raised the price forecast from $250 to $280, citing that the company is positioning itself for a potential breakout in 2026. Amazon's stock presents an attractive risk/reward opportunity ahead of its third-quarter earnings, Devitt noted. The analyst argued that despite recent negative sentiment surrounding AWS, the company's long-term growth thesis remains firmly intact."
"He noted multiple powerful growth drivers for the company. Devitt pointed to a healthy core retail business, supported by consumer surveys that show strong spending sentiment. He also highlighted Amazon's continued dominance over rivals. The analyst also noted that strong results from Prime Day and the Prime Big Deal Days event signal continued momentum for the e-commerce segment. While Temu, Shein, and TikTok Shop are still taking a share of U.S. retail, the analyst said Amazon remains relatively insulated among incumbent e-commerce platforms."
"While acknowledging investor concerns about AWS's growth relative to competitors, he remained optimistic. Devitt argued that strong underlying demand is evident in the division's accelerating backlog growth and increased capital expenditure guidance. The analyst highlighted that AWS's AI business is growing at a triple-digit rate and sees the strategic partnership with AI startup Anthropic as a significant contributor to re"
Amazon's core retail business shows strong momentum, supported by positive consumer spending sentiment and robust Prime Day and Prime Big Deal Days results. E-commerce market share remains resilient despite competition from Temu, Shein, and TikTok Shop. AWS exhibits accelerating backlog growth, increased capital expenditure guidance, and triple-digit growth in its AI business, aided by a strategic partnership with Anthropic. The advertising division is expanding rapidly, contributing to improved profitability prospects. These combined drivers strengthen Amazon's growth outlook and create an attractive risk/reward profile ahead of the upcoming earnings period.
Read at Benzinga
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