Last Update18 Oct 25

Amazon.com's analyst price target has been raised, with several analysts citing anticipated acceleration in AWS growth and continued momentum in the company's retail and grocery initiatives as key drivers of the revised outlook. The price target now stands higher by $20 to reach $270 per share.

Analyst Commentary

Recent Street research highlights a mix of optimism and caution among analysts evaluating Amazon.com's prospects, specifically as they pertain to the company's acceleration in cloud and grocery growth, operating performance, and competitive environment.

Bullish Takeaways

Bullish analysts see a clear path to accelerating revenue growth at Amazon Web Services (AWS), citing upcoming infrastructure expansions and strategic partnerships. These are expected to drive meaningful upside beginning in late 2025 and beyond.
The expansion and integration of fresh grocery delivery services into Amazon's broader retail ecosystem is viewed as a significant opportunity to increase customer engagement, retention, and share of wallet. The scale of the addressable grocery market supports further upside in valuation.
Data-driven signs of healthy North America retail growth, resilient demand, and improved order frequency support continued confidence in Amazon's execution, logistics leadership, and marketplace scale.
Some analysts identify new legislation and partnership initiatives as positive catalysts for future cash flow. This can be reinvested into automation and infrastructure, further enhancing long-term growth trajectories.

Bearish Takeaways

Bearish analysts caution that rising competition in grocery delivery and logistics from established players may compress margins and increase operating complexity. This requires prudent execution to capture projected share gains.
The persistence of challenges in AWS growth relative to top peers raises questions about Amazon's ability to maintain or expand market leadership. Any further disappointments could feed into concerns over long-term growth rates and profitability.
Some point to risk of dilution in operating income in the grocery segment as Amazon seeks increased share. They note cautious estimates about profit contribution per point of U.S. market capture.
Ongoing competitive responses in key verticals, such as automotive and buy now pay later finance, could create a more difficult environment to reaccelerate revenue and maintain segment leadership.

What's in the News

Amazon faces U.S. federal investigations after two Prime Air drones collided with a crane in Arizona, prompting a temporary halt of drone deliveries amid FAA and NTSB probes. Services were quickly restarted after an internal review (CNBC, TechCrunch).
Amazon is planning to hire 250,000 workers across full-time, part-time, and seasonal roles for the holiday season, highlighting ongoing growth in its logistics and retail operations (Bloomberg).
The company announced the launch of Amazon Grocery, a new private label brand consolidating favorites from Amazon Fresh and Happy Belly, offering more than 1,000 grocery items. Most are priced under $5 both online and in stores (Key Developments).
Amazon has expanded its third-party logistics service, Multi-Channel Fulfillment (MCF), to now support merchants on SHEIN, Shopify, and Walmart, enabling streamlined fulfillment and faster delivery across multiple online channels (Key Developments).
Amazon Web Services and SAP are collaborating to bring SAP Sovereign Cloud capabilities to the forthcoming AWS European Sovereign Cloud, deepening Amazon's commitment to digital sovereignty and regulatory compliance in Europe (Key Developments).

Valuation Changes

Fair Value has remained unchanged at $266.56 per share.
Discount Rate has fallen slightly from 8.34% to 8.34%.
Revenue Growth projections have risen slightly, increasing from 10.64% to 10.70%.
Net Profit Margin projections have decreased marginally, moving from 12.38% to 12.32%.
Future P/E ratio estimates have edged up from 33.58x to 33.67x.

AWS's leadership in cloud and AI, along with deep integration and enterprise relationships, positions Amazon for strong high-margin growth as digital adoption accelerates.
Enhanced logistics automation, international expansion, and a growing Prime ecosystem drive structural cost efficiency, improved margins, and sustained revenue growth.
Competitive, regulatory, and cost pressures across AWS and core retail risk squeezing margins and hindering Amazon's ability to sustain profitable, consistent long-term growth.

Catalysts

About Amazon.com

Engages in the retail sale of consumer products, advertising, and subscriptions service through online and physical stores in North America and internationally.What are the underlying business or industry changes driving this perspective?

Massive and still early-stage shift of global IT spend from on-premises to cloud, with management noting that 85–90% of worldwide IT expenditure remains outside the cloud and that this dynamic is poised to reverse over the next 10–15 years; AWS's broad functionality, leading security, and existing enterprise relationships position it to capture significant high-margin revenue growth as cloud and AI adoption accelerate.
Rapid advances and adoption of generative AI, coupled with Amazon's deep vertical integration (custom silicon, proprietary models, tools for agent building/deployment), are fueling both incremental demand for AWS infrastructure and the rollout of new AI-powered features across retail and devices, creating operating leverage and supporting potential future margin expansion in high-growth segments.
Ongoing optimization of Amazon's logistics and fulfillment operations-including further automation, robotics, and inventory placement enhancements-is driving structural cost reduction, faster delivery speeds, and improved customer experience, contributing directly to higher net margins and improved operating income in both North America and international markets.
Continued international expansion, especially in emerging markets, with both improving operational efficiency and growing Prime member base, is driving scalable revenue growth and contributing to margin uplift as these regions reach profitability, supporting long-term consolidated margin and EPS growth.
Strengthening Prime ecosystem and marketplace flywheel (content, exclusive live sports, product selection, increasing Prime sign-ups, and new verticals like healthcare and Project Kuiper) are increasing recurring revenues, share of wallet, and customer retention, supporting durable top-line and premium margin growth over the long term.

Amazon.com Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Amazon.com's revenue will grow by 10.6% annually over the next 3 years.
Analysts assume that profit margins will increase from 10.5% today to 12.3% in 3 years time.
Analysts expect earnings to reach $111.9 billion (and earnings per share of $10.14) by about September 2028, up from $70.6 billion today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $70.7 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 33.4x on those 2028 earnings, down from 36.0x today. This future PE is greater than the current PE for the US Multiline Retail industry at 21.6x.
Analysts expect the number of shares outstanding to grow by 1.43% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.45%, as per the Simply Wall St company report.

Amazon.com Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Persistent supply chain risks and uncertainty surrounding tariffs-especially those tied to China-could lead to higher costs for Amazon and its third-party sellers in the medium to long term; if these costs are absorbed or cannot be passed onto customers, this would pressure operating margins and possibly constrain revenue growth.
AWS, Amazon's main earnings driver, is experiencing both increased capital intensity (notably in custom chips and data centers) and growing competition, with challenges around supply constraints (e.g., power and semiconductors), and the need for massive ongoing investment-these factors risk compressing AWS's segment margins and limiting overall earnings growth if AWS fails to keep pace with rivals technologically or commercially.
Intensifying regulatory scrutiny (implied through references to legal risks, compliance, and SEC filings) and potential changes in global trade, data protection, and technology policy could raise compliance costs, limit Amazon's ability to scale certain businesses, and negatively affect profitability and revenue consistency.
Saturation and slower e-commerce growth in Amazon's core markets, particularly in mature geographies (e.g., U.S., U.K., Germany, Japan), could constrain long-term topline retail revenue growth and create greater dependence on more volatile or lower-margin international and emerging segment expansion.
Cost escalation risks from higher labor costs, logistics infrastructure investment, and the arms race in automation and AI (robotics, next-generation Alexa, Project Kuiper, etc.)-if not met with proportional efficiency gains or profitable monetization-could result in net margin compression and weaker earnings leverage over the long run.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $263.18 for Amazon.com based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $306.0, and the most bearish reporting a price target of just $225.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $905.9 billion, earnings will come to $111.9 billion, and it would be trading on a PE ratio of 33.4x, assuming you use a discount rate of 8.4%.
Given the current share price of $238.24, the analyst price target of $263.18 is 9.5% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.