Citizens maintains Amazon stock rating amid AI investment surge
#Amazon #AI investment #Citizens rating #AWS growth #Capital expenditures
📌 Key Takeaways
- Citizens analyst Andrew Boone reiterated a Market Outperform rating and a $315.00 price target for Amazon.com following mixed quarterly results.
- Amazon reported fourth-quarter 2025 revenue slightly above its high-end guidance, with operating income exceeding consensus estimates by 1%.
- The company plans to invest $200 billion in capital expenditures to support capacity buildout, anticipating a substantial increase in artificial intelligence demand.
- Amazon's AWS cloud division showed significant growth, with revenue increasing 24% year-over-year.
- Goldman Sachs adjusted its price target for Amazon, lowering it from $300 to $280 while maintaining a Buy rating.
📖 Full Retelling
Citizens analyst Andrew Boone reiterated a Market Outperform rating and a $315.00 price target for Amazon.com (NASDAQ: AMZN) on February 6, 2026, following the company's mixed quarterly results. This decision comes as Amazon reported fourth-quarter 2025 revenue slightly above its high-end guidance, with operating income exceeding consensus estimates by 1%, despite $2.4 billion in one-time expenses. The company's annual revenue reached $716.92 billion, marking a 12.38% growth over the last twelve months. Amazon's AWS cloud division showed significant growth, with revenue increasing 24% year-over-year, driven by strong demand across its services. This performance underscores Amazon's position as a leading player in the Broadline Retail industry with diversified revenue streams. The company plans to invest $200 billion in capital expenditures to support capacity buildout, anticipating a substantial increase in artificial intelligence demand, with its Trainium3 supply already committed until mid-2026. Despite this massive investment, Amazon maintains a moderate debt level and sufficient cash flows to cover interest payments. For the first quarter of 2026, Amazon provided revenue guidance that bracketed consensus expectations, though the high-end of its operating income guidance came in 3% below consensus estimates. Analysts predict Amazon will remain profitable this year with an EPS forecast of $7.25 for FY2026. InvestingPro analysis indicates that Amazon is currently undervalued based on its Fair Value calculation. In other recent news, Amazon reported its fourth-quarter 2025 earnings, surpassing revenue forecasts but slightly missing on earnings per share. The company's earnings report revealed a significant investment cycle in both its cloud computing and eCommerce sectors, with a fiscal year 2026 capital expenditure guidance of approximately $200 billion. Following this announcement, Goldman Sachs adjusted its price target for Amazon, lowering it from $300 to $280 while maintaining a Buy rating. These developments highlight Amazon’s ongoing commitment to expanding its infrastructure and services. Investors are closely watching these strategic moves as the company navigates its substantial investment plans. The revised price target by Goldman Sachs reflects the investment cycle’s potential impact on Amazon’s financial outlook. This series of updates provides insight into Amazon’s current operational focus and future planning.
🏷️ Themes
Investment, Technology, Economy, Market Analysis
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Capital expenditure
Costs associated with the fixed assets
Capital expenditure or capital expense (abbreviated capex, CAPEX, or CapEx) is the money an organization or corporate entity spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land. It is considered a capital expenditure when the asset is newly purchased...
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- 🏢 OpenAI (3 shared articles)
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- 🌐 Capital expenditure (2 shared articles)
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📄 Original Source Content
Citizens maintains Amazon stock rating amid AI investment surge Citizens analyst Andrew Boone has reiterated a Market Outperform rating and a $315.00 price target for Amazon.com (NASDAQ:AMZN) following the company’s mixed quarterly results. This target suggests potential upside from current trading levels, as the company continues to navigate a significant investment cycle. Amazon reported fourth-quarter 2025 revenue slightly above the high-end of its guidance, with annual revenue reaching $716.92 billion, representing 12.38% growth over the last twelve months. Operating income came in 1% above consensus despite approximately $2.4 billion in one-time expenses. The company’s AWS cloud division showed accelerated growth, with revenue increasing 24% year-over-year. This 4-point quarter-over-quarter acceleration was driven by strong demand across AWS services, reinforcing Amazon’s position in the broadline retail and cloud industries. To support anticipated demand for artificial intelligence, Amazon now expects to spend $200 billion on capital expenditures for the 2026 fiscal year. The company noted that supply for its Trainium3 chips is already committed until mid-2026. Despite this massive investment, analysts noted that the company operates with a moderate debt level and sufficient cash flows to cover interest payments. For the first quarter of 2026, Amazon provided revenue guidance that aligned with consensus expectations, though the high-end of its operating income guidance came in 3% below estimates. Analysts predict Amazon will remain profitable this year with an earnings per share (EPS) forecast of $7.25 for fiscal year 2026. Following these developments, Goldman Sachs adjusted its price target for Amazon from $300 to $280 while maintaining a Buy rating. The adjustment reflects the potential impact of the heavy investment cycle on Amazon’s financial outlook. Investors remain focused on how the company manages these strategic moves to expand its infrastruct...