Amazon Stock Falls Despite Strong Buy Rating and High Price Targets Ahead of Earnings
Amazon's stock has fallen about 4.6% to $233.66, sitting roughly 16% below its 52-week high as it approaches second-quarter earnings on July 30. Analysts maintain a strong buy rating with an average price target of around $313 — over 34% above the current stock price. The decline is attributed to concerns about rising capital expenditures, particularly in AI infrastructure, which have significantly reduced Amazon's trailing-12-month free cash flow from $25.9 billion to just $1.2 billion. Despite these worries, Amazon Web Services (AWS) continues to show strong growth with a 28% year-over-year increase in first-quarter revenue and three consecutive quarters of accelerating performance. Total net sales for the quarter rose 17%, reaching $181.5 billion, while operating income increased as well. Analysts are optimistic about these trends, which underpin their high price targets. The stock's current valuation appears to reflect significant pessimism — potentially offering a buying opportunity if AWS growth continues and capital spending remains manageable.
Topics: Amazon Capital Expenditures Earnings Report Price Target Analysis