Amazon Stock Falls Despite Strong Buy Rating and High Price Targets Ahead of Earnings
Amazon's stock has declined by about 4.6% in recent trading, despite no new company announcements, as concerns grow over rising capital expenditures tied to AI infrastructure investments. The average analyst price target for Amazon remains around $313 — roughly 34% above the current share price of approximately $232 — with a consensus rating of 'strong buy.' This wide gap between market sentiment and Wall Street expectations is notable just days before its second-quarter earnings report. The stock's decline reflects investor worries about Amazon’s increasing capital spending, which has led to a sharp drop in trailing-12-month free cash flow. The company plans $200 billion in 2026 AI-related investments and recently reported a significant year-over-year increase in capex. These concerns were amplified by Alphabet's own raised capital expenditure forecast for the same period. Analysts, however, remain optimistic due to Amazon Web Services' (AWS) strong performance — AWS revenue grew 28% YoY in Q1 with three consecutive quarters of accelerating growth. Total net sales and operating income also rose year-over-year, supporting a positive outlook despite near-term financial pressures.
Tickers: $AMZN
Topics: AI investment Amazon analyst price targets capital expenditures free cash flow