Amazon stock price target updated by analyst ahead of earnings

A young Princeton graduate called Jeff Bezos launched his brilliant idea on July 5, 1994. Bezos named his Bellevue, Wash., garage-based company "Cadabra," after the magician's "abracadabra" incantation. However, he apparently dropped that name since it was too near to "cadaver."  

Bezos chose "Amazon" from a dictionary because it was "exotic and different" like his company. The startup sold Douglas Hofstadter's "Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought" online on July 16, 1995.  

As you know, Amazon (AMZN) grew significantly. Over time, the corporation expanded from books to other products and services, including Prime Video, which gives over 200 million subscribers access to hundreds of TV series and movies. E-commerce's disruption of worldwide retail is known as the "Amazon Effect".  

As it grows, Amazon uses AI. Bezos resigned as CEO on July 5, 2021, Amazon's 27th anniversary. His garage-founded corporation is worth $1.9 trillion. Amazon announced 14% higher fourth-quarter revenue of $170 billion from $149.2 billion in February. Net income rose from $278 million, or 3 cents per share, to $10.6 billion, or $1 per share. Strong Christmas purchases boosted numbers.  

While we've made meaningful progress in our financial measures, what we're most pleased about is the continued customer experience improvements across our businesses," CEO Andy Jassy told analysts on the results call. "These results represent a lot of invention, collaboration, discipline, execution, adjusting, and reimagining from teams across Amazon," added he.  

Amazon Web Services (AWS) revenue rose 13%, up from 12% the previous two quarters. Operating profit rose 38% at AWS. Enterprises and governments store and manage data on AWS. Customers are training and running huge language models and other AI applications with it.  

Amazon announced on March 27 that it would invest $2.75 billion in San Francisco-based generative AI company Anthropic to expand its AI offerings. Amazon previously invested $1.25 billion in September. Amazon will release quarterly results on April 25.  

FactSet analysts predict 83 cents per share on $142.62 billion in sales. Last year, the corporation earned 31 cents per share on $127.4 billion. Wells Fargo analyst Ken Gawrelski boosted's price objective to $217 from $211 while maintaining an overweight rating.  

In an investor's note, Gawrelski added the stock to its Q2 Tactical Ideas List before the next favorable revisions. The analyst raised his second-quarter operating income forecast by $750 million to $14.5 billion, 15% above Wall Street, due to the new FBA pricing structure, which allows third-party sellers to automate order fulfillment and delivery.  

Wells Fargo expects $1.2 billion in operational income from restructured FBA fees and cost externalization from FBA inventory placement fees, comparable to the first quarter. My AWS tests show sustained first-quarter acceleration from "significantly moderating optimization, cloud migration acceleration, and GenAI workloads."  

Fortune reported last month that the FTC began investigating Amazon's new surcharges on U.S. retailers selling goods through its online megastore. In September, the FTC sued Amazon for harming consumers with its online retail monopoly by raising prices and favoring its products over competitors.  

The suit claims that Amazon "bury" lower-priced products deep in its search ranks, rendering them "invisible," while conditioning sellers to attain "Prime" eligibility, which automatically links their products to the company's fulfillment services. Amazon said the lawsuit “makes clear the FTC’s focus has radically departed from its mission of protecting consumers and competition.”  

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