Amazon just posted a blowout second-quarter report. What analysts are saying

Published Fri, Aug 4 20237:12 AM EDTUpdated Fri, Aug 4 202311:33 AM EDT

Analysts on Wall Street lauded Amazon's latest quarterly earnings. The e-commerce giant flew past expectations Thursday , reporting its largest earnings beat since the fourth quarter of 2020. Amazon also notched double-digit growth on the heels of a strong two-day Prime discount event earlier this year. Amazon was up more than 9% in the premarket Friday. AMZN 1D mountain Amazon popped after strong earnings JPMorgan's Doug Anmuth reiterated an overweight rating on Amazon and raised his price target to $180, implying roughly 40% upside from Thursday's $128.81 close. Anmuth said Friday that the second-quarter results and third-quarter outlook will help lift shares higher, and also pointed to strength in Amazon Web Services. "Our bull thesis on AMZN has been AWS stabilizing while Retail sees accelerating growth and meaningful margin expansion which, combined with a decline in overall AMZN capex, should drive meaningful FCF inflection in 2023," Anmuth said. "We believe 2Q results and the 3Q guide suggest that thesis is playing out and AMZN estimates should move meaningfully higher." Goldman Sachs analyst Eric Sheridan also hiked his price target to $180 from $165, keeping his buy rating on the stock. Sheridan said he expects margins to continue to grow as the company continues to add to e-commerce and advertising strength. "After trading in a range ( & underperforming the broader market) for most of the past 2-3 years, we see AMZN as well positioned for future outperformance as eCommerce margins continue a trajectory of scaling over headwinds created in recent years, as its advertising business continues to achieve scale and as AWS can still benefit from a long-tailed structural growth opportunity in the shifting needs of enterprise customers (while producing a balance of growth and margins)," Sheridan said. Bank of America's Justin Post, meanwhile, raised his price target to $174 from $154, implying a 35% gain from Thursday's close. Post highlighted better-than-expected growth in e-commerce and Amazon Web Services, which could be further accelerated due to growing artificial intelligence integration and investments. "We think Amazon is well positioned to capitalize on the global growth of eCommerce and other secular trends such as cloud computing, online advertising and connected devices," Post said. Citi's Ronald Josey maintained a buy rating on Amazon stock with a $167 per share price target, up from $145, which equates to about 30% upside. Josey said the strength of the company's e-commerce and AWS segments will aid margin growth. "Simply put, with AWS growth stable and improving eCommerce operations, we believe Amazon is well positioned to deliver greater margin expansion — we note 2Q OI margins expanded 300 bps Y/Y — and shares remain one of our top picks," Josey said. Morgan Stanley's Brian Nowak increased his price target on Amazon to $175 from $150 and reiterated his overweight rating. Nowak added that he forecasts AWS growing at a 15.5% clip in the third quarter and 20% in the fourth quarter. "After multiple quarters of optimizations, AWS has stabilized and is now seeing more customers shift their focus toward driving innovation, bringing new workloads to the cloud," Nowak said. "We think this stability/incremental work load trend has continued into 3Q … which given the easing Y/Y 2H compares (due to higher optimizations) should lead to a rather steep re-acceleration." — CNBC's Michael Bloom contributed to this report.