Amazon's stock price hits the largest single-day increase in three years, with analysts raising the target price to $290

According to Zhitong Finance APP, Amazon (AMZN.US) recorded its largest single-day increase in nearly three years on Friday. Thanks to double-digit growth in both cloud computing and retail businesses, this e-commerce giant has exceeded revenue and profit expectations for the fifth consecutive quarter. The company's third-quarter performance showed a 16% year-on-year profit increase, primarily driven by strong performance in online retail, subscription services, and Amazon Web Services (AWS).

Analyst Ahan Vashi from the investment research platform Seeking Alpha commented, "Amazon easily surpassed the revised expectations on Wall Street, with both AWS and advertising businesses performing well. As long as the macro economy remains resilient, Amazon's growth momentum is expected to continue in the foreseeable future." He pointed out that Amazon is in a new phase of steady growth, and its diversified business structure provides a solid foundation for profit expansion.

Investment firm Seaport Research raised Amazon's target price from $250 to $290. Seaport analyst Aaron Kessler noted in his research report that Amazon shows sustained growth potential in the AI-driven cloud computing sector, laying the groundwork for the company's long-term profitability. With the acceleration of AWS growth and the widespread application of AI technology in enterprise services, Amazon is expected to continue consolidating its leadership position in the global cloud computing market.

Wall Street analysts generally believe that the performance displayed by Amazon CEO Andy Jassy in the earnings report is "impressive," especially as the AWS business maintains high growth rates with the help of its self-developed chip Trainium. Needham analysts Laura Martin and Dan Medina pointed out in their research report, "Amazon is the only hyperscale cloud vendor that has not experienced cloud computing power constraints. Since 2022, the company has doubled its cloud power capacity and is expected to continue growing by 2027."

Although market focus has largely been on AWS performance, the company's retail business also demonstrated strong resilience, indicating that consumer spending has not slowed due to macro pressures or tariff uncertainties. The earnings report showed that online store revenue grew nearly 10% year-on-year, and net sales from third-party seller services increased by 12%, both exceeding expectations. Oppenheimer analyst Jason Helfstein noted, "Amazon is one of the few large-cap tech companies that can continue to benefit from the long-term structural growth trend in global e-commerce. Its vast product selection, low-cost fast delivery, and the success of products like Kindle, Prime Video, and Amazon Music have allowed it to continuously expand its market share in competition."

It is worth noting that the quarterly operating profit margin slightly declined, but the main reason was the $2.5 billion expense accrued for settling with the Federal Trade Commission (FTC). Seeking Alpha analyst Kenio Fontes stated that excluding this one-time impact, Amazon's operating profit margin would actually expand by 100 basis points to 6.9%. He added, "If the margin compression is due to structural cost increases, that would indeed be a negative factor, but the changes this quarter are mainly cyclical rather than structural ”