Amazon and Alphabet Drive AI Market Growth, Expect Significant Free Cash Flow Increase
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3h ago
0mins
Source: Fool
- Amazon Financial Performance: Amazon's total revenue grew 13% year-over-year in Q3, reaching $180 billion, and while free cash flow has declined due to increased capital expenditures, long-term investments are expected to enhance profitability, with free cash flow projected to hit $20 billion by 2025.
- Capital Expenditure Growth: Amazon's capital expenditures approached $120 billion over the trailing twelve months, marking a 72% year-over-year increase, primarily aimed at enhancing fulfillment efficiency in e-commerce and cloud computing, which is expected to significantly reduce operating costs.
- Google Advertising Revenue: Google's search revenue surged 16% year-over-year in Q3, with total revenue expected to reach $455 billion by 2026, as AI technology enhances ad effectiveness, strengthening the company's competitive position in the market.
- Free Cash Flow Projections: Google's free cash flow is projected to grow from $16 billion in 2015 to $65 billion by 2025, with analysts forecasting it could reach $157 billion by 2029, potentially doubling the stock price within the next five years.
Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AMZN is 294.71 USD with a low forecast of 250.00 USD and a high forecast of 340.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
43 Analyst Rating
40 Buy
3 Hold
0 Sell
Strong Buy
Current: 246.290
Low
250.00
Averages
294.71
High
340.00
Current: 246.290
Low
250.00
Averages
294.71
High
340.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
