Amazon (AMZN) Stock Forecast & Price Target

Amazon.com demonstrates a strong financial performance, marked by a 19% year-over-year increase in Amazon Web Services (AWS) revenues, reaching $28.8 billion in 4Q24, alongside a notable 730 basis point enhancement in operating margin to 37%. Retail-related revenues continue to dominate, accounting for approximately 75% of total revenue, with international segments showcasing an improvement in operational margins, reflecting a 400 basis point increase year-over-year. Furthermore, the company has seen substantial growth in its Prime membership and advertising segments, indicating a diversified revenue base and potential for continued expansion in higher-margin business areas.

Amazon.com faces a challenging outlook as it has revised its FY25 revenue estimate down to $699.4 billion, reflecting a growth rate of only 10% year-over-year, which is slightly below previous forecasts. The stagnation in Product Sales, which have remained between $61 billion and $67 billion in the first three quarters since the start of 2021, raises concerns about the company's growth potential in the retail sector. Moreover, the decision to reduce the useful life of certain servers is expected to decrease FY25 operating income by approximately $700 million, compounding the uncertainties surrounding Amazon's financial performance as external economic conditions may further inhibit growth.