Why One Top Analyst Is Bullish on Amazon Stock (AMZN) Despite AWS Cost Pressures
Amazon (AMZN) rose 2% on Tuesday to close at $212.77, and one top Wall Street analyst sees more upside ahead. In a new update, analyst Michael Morton at MoffettNathanson raised his price target on the stock from $250 to $253 while keeping a Buy rating, suggesting about 19% potential upside from current levels. Morton believes Amazon is well-positioned to beat profit estimates in 2025 and 2026, even as cost pressures rise in its cloud unit, Amazon Web Services (AWS).
Confident Investing Starts Here:
It is worth noting that Morton has a success rate of 70%, with an average return per rating of 22.5% over a one-year timeframe.
Top Analyst's Take on Amazon
The analyst said that while Amazon is known for its shopping business, its real profits come from AWS and advertising. Following Amazon's latest quarterly breakdown on segment-level depreciation, Morton updated his AWS forecast and believes that most analysts may be underestimating the rising costs from Amazon's large cloud investments.
He expects Amazon to spend about '$200 billion from FY24 to FY26 ' to expand AWS, mostly on servers and network equipment, which lose value quickly over time. As a result, depreciation costs at AWS are set to rise from '13% in Q424 to 23% in Q426.' This could lower AWS profit margins by about 10 percentage points.
Even with some margin pressure ahead, Morton remains upbeat about Amazon's outlook. He sees the next 18 months as strong, particularly for AWS margins in 2025. He expects Amazon to beat profit estimates in both 2025 and 2026, supported by strong demand, better cost efficiency, and steady growth in its high-margin advertising business.
His updated price target of $253 reflects the view that Amazon's strong earnings performance in the near term is not yet fully priced in by the market.
What Is the Price Target for Amazon Stock?
Overall, Wall Street is bullish on Amazon stock, with a Strong Buy consensus rating based on 47 Buys and one Hold recommendation. The average AMZN stock price forecast of $243 indicates 14.21% upside potential.
See more AMZN analyst ratings
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
an hour ago
- Globe and Mail
U.S. Republicans agree to drop retaliatory tax from Trump's big budget bill, citing G7 agreement
U.S. Treasury Secretary Scott Bessent announced Thursday that he had asked Republicans to pull what has been called the 'revenge tax' from President Donald Trump's signature tax bill, after an agreement among G7 countries. Republican Senators quickly agreed to remove the revenge tax, Section 899 of the legislation. The proposed tax measure was a major concern for a broad range of Canadian investors and had caused some on Wall Street to speculate that it could chase away foreign investment in the United States. The original version of the bill would have allowed the U.S. to impose levies in response to what it calls 'discriminatory or unfair taxes' in foreign countries, including Canada's digital services tax, which was introduced in 2024. The first DST payment is due just days from now, on June 30. It also took aim at a global minimum tax deal reached in 2021, in which many countries, including the U.S. under then-president Joe Biden, backed a push by the Organization for Economic Co-operation and Development to tax companies at a rate of at least 15 per cent no matter where they were headquartered. But the U.S. never implemented such a tax, and the idea was opposed by Republicans. 'After months of productive dialogue with other countries on the OECD Global Tax Deal, we will announce a joint understanding among G7 countries that defends American interests,' Mr. Bessent said Thursday in a post on X, as he announced the decision to remove the revenge tax. Mr. Bessent did not make specific reference to the DST. He said G7 countries will work with countries in the G20 and the OECD to implement the agreement over the coming weeks and months. 'This understanding with our G7 partners provides greater certainty and stability for the global economy and will enhance growth and investment in the United States and beyond,' he said. The Associated Press reported that Senate Finance Committee Chairman Mike Crapo and House Ways and Means Committee Chairman Jason Smith said they would remove Section 899 from the bill. Canada's Finance Minister, François-Philippe Champagne, responded positively to Mr. Bessent's statement on X, but did not provide further detail as to what the change would mean for Canada. 'At our last G7 Finance Ministers and Central Bank Governors meeting we agreed to work together to restore greater stability and predictability for the world economy. We welcome Sec. Bessent's work to have Section 899 removed from consideration in the bill before Congress,' he said. The G7 did not release a statement Thursday. Mr. Trump's One Big Beautiful Bill, the sprawling piece of legislation that would extend his 2017 tax cuts and implement much of his domestic agenda, continues to be debated in Washington. What's in Trump's big budget bill? From cuts to taxes and Medicaid, here's what to know Mr. Trump has said that he wants the bill finalized for his approval by the fourth of July, a timeline that his press secretary, Karoline Leavitt, repeated Thursday. In recent weeks, Canadian wealth managers have warned of potential U.S. tax hikes on foreign investors based on the provisions of Section 899. As originally worded, the provision would have increased the U.S. tax rate for Canadian companies and other international investors. It could have cost Canadian investors who own U.S. securities up to $81-billion in additional taxes over seven years, according to an estimate by the Securities and Investment Management Association. The Canadian Chamber of Commerce also warned that the bill could result in Canadians' retirement savings being withheld to pay U.S. taxes, as retaliation for Canada's digital services tax or other provisions related to undertaxed profits or a global minimum tax. That's because Section 899 could have imposed withholding taxes on hundreds of billions of dollars of U.S. investments held by government-sponsored pension-fund managers in Canada. David Pierce, the Chamber's vice-president of government relations, said it in a statement that the U.S. move was a positive one. 'Section 899 was bound to escalate the consequences of this trade war for consumers, investors, pensioners, and businesses. We are glad to see the U.S. administration de-escalating, and we hope this leads to further co-operation at the international level,' he said, adding that the chamber still believes Canada should drop its DST in response to the 'olive branch' from the U.S. Canada refuses to pause digital sales tax as trade talks with U.S. continue Friday Canadian tax experts say Mr. Bessent's comments leave many questions unanswered as to what exactly has been proposed. Canada and other members of the OECD have been negotiating for years about acting together on tax reform related to multinational corporations. The talks have been divided into two pillars. Pillar one has generally focused on issues such as digital services taxes, where a country would collect taxes on the profits of services provided by a multinational in that country. This would affect businesses such as Netflix, Disney and other streaming services. Pillar two has focused on the idea of a global minimum corporate tax in an effort to address concerns that countries are in a race to the bottom to compete with each other through lower taxes. Mr. Bessent's statement only referred to pillar two and did not mention pillar one. Canadian tax experts say it's unclear what this latest development means for the continuing tension between the U.S. and Canada over its DST. It is possible that the DST could be an issue for negotiation in the planned summer negotiations between the two countries on trade. Allison Christians, the H. Heward Stikeman Chair in Tax Law at McGill University, said more details need to emerge before the full implications can be understood. 'The original bill could have increased taxes Canadians pay on certain U.S. investments every year until Canada relinquished its digital services tax and its application of global minimum corporate taxes to U.S. companies,' she said. 'All I know is that they're saying that we've agreed to something that seems to exempt the U.S. companies from a global minimum corporate tax, and I don't understand whether that also means U.S. companies won't have to pay digital services taxes.' Prof. Christians said it was debatable whether the U.S. bill's provisions would have applied in Canada anyway. 'We're in such a state of flux,' she said. Brian Ernewein, a senior adviser at KPMG and a former senior tax official with the federal Finance Department, said many clients have been concerned about the potential implications of the revenge tax. 'It's a very positive result that 899 has come off,' he said in an interview. 'There was high anxiety about it.' Mr. Ernewein reviewed Mr. Bessent's statements, but said it is unclear what exactly the G7 agreement involves. 'There are a lot of questions as to what that means,' he said. With a report from Clare O'Hara in Toronto
CBC
2 hours ago
- CBC
Treaty 8 First Nations call for 2% resource revenues from projects on their land
Treaty 8 First Nations chiefs in Alberta are calling for a two-per-cent share of royalties from projects that develop resources from their land. The chiefs met with Premier Danielle Smith in Calgary on Thursday to raise various concerns, including revenue sharing. Trevor Mercredi, grand Chief of the Treaty 8 First Nations of Alberta, said the meeting was urgently needed due to speed with which legislation is moving that could lead to major projects affecting Treaty 8 communities. "There has to be some sort of a relationship developed between Alberta and the nations, so we can move forward with some of these projects in a good way for our people," said Mercredi. "We're not looking for a handout, we're not looking for the province to come take care of our people, we don't need the province to take care of our people. We need our own people to serve and take care of our people" The meeting came on the same day that Bill C-5, Prime Minister Mark Carney's 'nation-building' projects bill, was passed by the Senate unamended. The legislation allows the prime minister's cabinet to streamline approvals for some projects that have the potential to boost the Canadian economy. But the bill has received criticism from some, including Mercredi, for the possibility it could lead to insufficient consultation with Indigenous peoples. Mercredi said resource revenue sharing is how his community can better support itself through funding education and health services, especially due to how profitable drawing resources from within Treaty 8 land, in northern Alberta, has been for the province. "You hear Premier Smith and all of the others talk about the millions and billions and trillions coming out of Alberta. That's from our backyards," Mercredi said. "Every day, we have industry and the province coming into our nations with hat in hand, looking for projects. It's not the other way around." Smith said the provincial government is looking for ways to ensure all First Nations in Alberta receive revenue from natural resources within the province. But instead of royalties, Smith said she believes this should be accomplished through equity. She pointed to the Alberta Indigenous Opportunities Corporation as an example. It's set up to facilitate investment by Indigenous groups in natural resource, agriculture, telecommunication and transportation projects. "Those are the kinds of things that will deliver the long-term revenue streams that I think that they're looking for," Smith said. "We share the aspiration, we just have a different way of supporting it." A seat at the table on emergency management Treaty 8 First Nations of Alberta rejected Alberta's attempts to "assert jurisdiction through legislation like the Sovereignty Act," according to a statement the organization issued Thursday. It called for a formal recognition of Treaty 8 governance as a government-to-Nation partner. Thursday's meeting also saw First Nations chiefs raise emergency management as an issue to the province, Mercredi said. He specifically pointed to a need to reinforce fire-suppression services, as Alberta contends with destructive wildfire seasons each summer. More broadly, Mercredi said the group wants more input with the province about responding to crises, to find long-term solutions to problems First Nations groups in Alberta face each year. "It's a new world we live in. Alberta's on fire, and Alberta's been on fire for the last five or six years," he said. "Our people are really traumatized, our people are being removed, our nations are always looking at the smoke, the lightning. It's very concerning and Alberta has to pick up on their services when it comes to fire." He added that he believes Smith was receptive to the issues his group raised Thursday, but for too long, First Nations groups haven't had a sufficient seat at the table in these negotiations. Smith will meet with the group again in August in Treaty 8 territory.
National Post
2 hours ago
- National Post
Canucks set to sign Conor Garland to $36 million deal: report
Count Conor Garland the latest person in Vancouver to say 'thank you Jim!' Article content The crafty winger is set to sign a six-year, $36-million contract extension with the Vancouver Canucks — whose president of hockey operations is Jim Rutherford, of course — CHEK-TV's Rick Dhaliwal reported Thursday evening. Dhaliwal's connections with agents and team sources is well-known so it's a safe bet his information is accurate. Article content Article content Article content Sounds like the Connor Garland extension in Vancouver could be 6 years and 36 million dollars. — Rick Dhaliwal (@DhaliwalSports) June 27, 2025 Article content The Canucks won't be able to officially report the deal until free agency opens on July 1 because he still has one year to go on his current deal, which carries a cap hit of $4.95 million for next season. Article content Garland's new deal will kick in for the 2026-27 season. Article content It's really the second time, or even third, Garland has been able to thank a James in charge of the Canucks, after Jim Benning first traded for Garland in the summer of 2021 and then again not long after when Benning signed Garland to his current deal. Article content Playing for the Canucks has proven to be an excellent experience for the Massachusetts native, who has tallied 197 points over his four seasons as a Canuck. His hustle and obvious desire to win night in night out has made him a fan favourite as well. A six-year deal will carry Garland until he's 36. He was set to be an unrestricted free agent after his current contract expired. Article content 'Thank you Jim' was first voiced by former Sportsnet 650 host James Cybulski who tried to rally some support towards Benning early in the disastrous 2020-21 season, saying that while the Canucks under Benning had often struggled, his efforts hadn't been all bad. Benning was fired as Canucks GM in December 2021. Article content
