Amazon Raises Price Target to $325, Expects Q1 Revenue of $178.5B
Amazonis scheduled to report results for its first quarter of 2026 after the market close on Wednesday, April 29, with a conference call scheduled for 5:30 pm ET. Here's what to watch for:EXPECTATIONS:During the company's last earnings call, Amazon said it saw Q1 revenue of $173.5B-$178.5B, with consensus at the time at $175.24B. The company also said Q1 net sales were expected to be between $173.5B and $178.5B, or to grow between 11% and 15% compared with Q1 2025. This guidance anticipated a favorable impact of approximately 180 basis points from foreign exchange rates. Operating income was expected to be between $16.5B and $21.5B, compared with $18.4B in Q1 2025."This guidance includes approximately $1B of higher year-over-year Amazon Leo costs as we scale in 2026, as well as investment in quick commerce and even sharper prices in our international stores business. This guidance assumes, among other things, that no additional business acquisitions, restructurings, or legal settlements are concluded," Amazon stated at the time.Current consensus EPS and revenue forecasts for Amazon's first quarter stand at $1.63 and $177.3B, respectively.TARGET RAISE:Ahead of quarterly results, Mizuho raised the firm's price target on Amazon.com to $325 from $315 and kept an Outperform rating on the shares. The firm upped its estimates for Amazon to reflect the company's incremental disclosures around scaling chip and AI revenue at Web Services, and new cloud deals including OpenAI, Anthropic and Meta. Amazon offered positive comments on its quarter-over-quarter growth in the shareholder letter, scaling Trainium capacity, and increasing central processing unit demand, Mizuho told investors in a research note. The firm cited peer group multiple expansion for the target boost.BULLISH AHEAD OF RESULTS:Last week, Oppenheimer also raised the firm's price target on Outperform-rated Amazon.com to $275 from $260 as it remains bullish ahead of Q1 results, with Amazon shares now starting to reflect the improving outlook for AWS after annual CEO letter. While Oppenheimer forecasts 2026/2027 AWS revenue up 29%/30%, the firm sees potential upside to 42%/44% if capex is deployed in linear fashion and revenue/GW holds at historical levels. Meanwhile, advertising trends remain healthy but are expected to slow vs. FY25, says the firm. Oppenheimer expects Amazon to continue focusing on e-commerce margin improvements globally, but higher fuel costs could weigh on near-term results.ADDED MOMENTUM:UBS analyst Stephen Ju raised the firm's price target on Amazon.com to $304 from $301, while keeping a Buy rating on the shares. Amazon is expected to report Q1 results on April 29, with added momentum from major AI-related deals with OpenAI and Anthropic contributing to a roughly $200B increase in backlog, the firm told investors in a research note. Estimates for AWS growth and 2027 operating income sit well above consensus, supporting a bullish view that earnings estimates and valuation multiples will continue to re-rate higher despite recent share price gains, UBS added.Meanwhile, BMO Capital raised the firm's price target on Outperform-rated Amazon.com to $315 from $310. Investors continue to seek return on investment validation but the firm says its channel checks indicate AWS growth acceleration in the first half of the year. Macro uncertainty and geopolitical instability cast a growing shadow over retail sales, but in the near term, consumers continue to show resilience, BMO added.INVESTMENT IN ANTHROPIC:Amazon said it Anthropic are deepening their collaboration with a commitment from Anthropic to spend more than $100B over the next ten years on Amazon Web Service technologies. "This encompasses current and future generations of Trainium (Amazon's custom silicon) and tens of millions of Graviton cores (Amazon's widely-adopted CPU chip) to provide superior price performance. Anthropic will secure up to 5 gigawatts of capacity to train and power their advanced AI models, including significant Trainium3 capacity expected to come online this year. The collaboration also includes a meaningful expansion of international inference in Asia and Europe to better serve Claude's growing international customer base," Amazon said in a statement. The commitment includes Trainium2, Trainium3, Trainium4, and the ability to purchase future generations of Trainium as they become available. AWS customers will be able to access the full Anthropic-native Claude console from within AWS. Separately, Amazon will invest $5B in Anthropic today and up to an additional $20B in the future tied to certain commercial milestones. This is in addition to the $8B Amazon previously invested in Anthropic.GLOBALSTAR ACQUISITION:Earlier this month, Amazon.com and Globalstarannounced that they have entered into a definitive merger agreement under which Amazon will acquire Globalstar, enabling Amazon Leo to add direct-to-device services to its low Earth orbit satellite network and extend cellular coverage to customers beyond the reach of terrestrial networks. In addition, Amazon and Appleannounced an agreement for Amazon Leo to power satellite services for iPhone and Apple Watch, including Emergency SOS via satellite. The new capabilities are part of Amazon's long-term vision for space-based connectivity, and Amazon plans to work with mobile network operators and additional partners to deliver on that vision and extend reliable, high-speed connectivity to customers, no matter where they are in the world.As part of the agreement, Amazon will acquire Globalstar's existing satellite operations, infrastructure, and assets, including MSS spectrum licenses with global authorizations. Under the terms of the merger agreement, prior to closing, Globalstar stockholders will elect to receive for each share of Globalstar common stock they own either $90.00 in cash or 0.3210 shares of Amazon common stock with a value capped at $90.00 per share. The transaction is expected to close in 2027, subject to the satisfaction of certain closing conditions, including receipt of regulatory approvals and the achievement by Globalstar of certain HIBLEO-4 replacement satellite milestones.SENTIMENT:Check out recentas measured by TipRanks.
