Amazon Shares Surge 15% as Banks Race to Boost Price Targets After Cloud Boom

Amazon’s stock skyrocketed 15.32% on Friday, closing at $271.58, after the company’s latest earnings report blew past expectations. The standout figure was a 36.8% jump in Amazon Web Services revenue, hitting $42.2 billion in just one quarter the fastest growth rate in over four years.

Amazon’s total sales for the quarter reached $200.6 billion, beating analysts’ forecasts of $197 billion by a solid margin, while earnings per share came in at $5.75 compared to the $1.81 predicted by Wall Street. This surprise surge sent the stock up nearly 9% after hours, prompting a wave of price target raises from leading banks.

Wall Street Bets Big on Amazon’s Cloud

Daniel Kurnos of Benchmark lifted his price target from $370 to $400, calling the quarter one of Amazon’s best in a decade and highlighting two decades of closely watching the company. JPMorgan increased its target to $365, citing a massive $496 billion backlog in cloud commitments, which is about two and a half times last year’s level.

Other firms also jumped in: Rosenblatt now eyes $345, while TD Cowen, Truist, and KeyBanc each set their targets at $350. Meanwhile, Telsey Advisory Group, Mizuho, and RBC Capital placed theirs between $330 and $335. Wolfe Research and Citizens held firm at $315.

But Benchmark added a note of caution. Despite the impressive top-line growth, Amazon’s free cash flow has taken a hit, spending $7.6 billion more than it earned over the last year, down from a surplus of $18.2 billion previously. CEO Andy Jassy is driving a $220 billion investment push into data centers and chip production, with rising memory costs squeezing margins further. This drain on cash reflects broader AI-related spending pressures felt by cloud giants across the industry.

In contrast, not all high-profile stocks received upgrades. Firms like Goldman Sachs and Barclays recently cut expectations for other tech names such as Robinhood, despite strong results. Cantor Fitzgerald, while trimming Amazon’s target to $320 due to valuation changes, maintained an Overweight rating.

The dynamic between booming revenue and heavy spending will likely shape investor sentiment in coming quarters as Amazon executes its aggressive expansion plans.

This content is for informational purposes and should not be considered financial advice.