S&P 500 power plant amazon's (NASDAQ: AMZN) is having a great run. So far this year, shares are up about 29%. As a long-term investor in the tech company (it's the largest single stock holding in my portfolio right now), I'm pretty happy with that performance.
Is there room for further share price gains? Wall Street analysts seem to think so. Here's a look at their latest share price forecasts.
Brilliant third quarter earnings
Before focusing on stock price targets, it's worth mentioning amazon's recent third-quarter earnings. That's because they were excellent.
I've been saying for a while that amazon's profits are going to skyrocket at some point, and this was seen in the third quarter numbers. While net sales only increased 11% year-over-year to $159 billion, operating income jumped from $11.2 billion to $17.4 billion, an increase of 55%. Meanwhile, earnings per share were $1.43 versus $0.94 a year earlier – an increase of 52%.
Breaking down the sales figure, there was a 19% growth in the important cloud computing division (AWS). There was another 19% increase thanks to digital ads (amazon is now the third largest player in the digital advertising space behind Goal and Alphabet).
Looking ahead, the company told investors that net sales are expected to range between $181.5 billion and $188.5 billion this quarter (growth of 7-11%). It expects operating income of between $16 billion and $20 billion, compared to $13.2 billion in the fourth quarter of 2023.
Overall, there was a lot to like in the results.
New stock price targets
So it's no surprise that many Wall Street analysts have raised their price targets for the stock in recent days. I have listed your new goals in the table below.
| Corridor | New goal | old target |
| Raymond James | $230 | $205 |
| Morgan Stanley | $230 | $210 |
| Baird | $220 | $213 |
| Benchmark | $215 | $200 |
| BMO | $236 | $230 |
| BofA Global Research | $230 | $210 |
| Citi | $252 | $245 |
| German Bank | $232 | $225 |
| HSBC | $225 | $220 |
| Jefferies | $235 | $225 |
| J.Morgan | $250 | $230 |
| MoffettNathanson | $235 | $229 |
| oppenheimer | $230 | $220 |
| Piper Sandler | $225 | $215 |
| erythrocytes | $225 | $215 |
| Rosenblatt Values | $236 | $221 |
| Roth MKM | $220 | $215 |
| Scotiabank | $246 | $245 |
| Stifel | $245 | $224 |
| Susquehanna | $230 | $220 |
| Telsey Advisory Group | $235 | $215 |
| Truistic values | $270 | $265 |
| USB | $230 | $223 |
| wedbush | $250 | $225 |
| oppenheimer | $230 | $220 |
As you can see, many brokers have increased their price targets. Of the brokers listed, Truist has the highest target: $270. The average price target in the table is $234, 19% above the current stock price.
I'm looking for $250
My own price target for amazon stock of $250. I estimate it can get there in the next 12 months or so.
My thesis revolves around three key factors. The first is earnings growth. Next year, earnings per share (EPS) are expected to grow 20% to $6.00. However, I think there is room to improve earnings forecasts for 2025.
The second is the valuation. Currently, the price-to-earnings (P/E) ratio using the 2025 EPS forecast is just 32. That's practically an all-time low for amazon, so I see room for a higher valuation.
The third is the fact that the stock has lagged other Big tech stocks in recent years. So, you might have some catching up to do. It's worth noting here that compared to other Big tech stocks, professional fund managers don't own enough amazon ownership.
In short, I think the stock can rise as earnings grow and the valuation rises.
Of course, there are no guarantees. amazon may need to spend more than expected on ai infrastructure and this could affect its profits. Another risk is a slowdown in consumer spending and lower growth in its e-commerce division.
However, from a medium-term perspective, I see potential for strong gains.
