Amazon stock price target raised to $271 by UBS on lower tariff concerns

UBS has raised its price target on Amazon (AMZN) to $271 from $249, maintaining a Buy rating, citing the unwinding of previous conservative estimates, better-than-expected advertising performance, and subsequent increases in GMV and EBIT projections for 2026 and 2027. Deutsche Bank also increased its AMZN target to $266 with a Buy rating. Concurrently, Amazon is closing its Shanghai AI lab amid rising US-China tensions, and founder Jeff Bezos is reportedly considering acquiring CNBC. This comes as Google secured a significant $1.2 billion cloud deal with ServiceNow, highlighting ongoing competition in the enterprise cloud market.

Analysis

Wall Street sentiment for Amazon.com (AMZN) is strengthening, evidenced by UBS raising its price target to $271.00 and Deutsche Bank to $266, both maintaining Buy ratings. UBS's revision is driven by unwinding previous conservative estimates related to tariff impacts, leading to a ~2% increase in 2026-2027 Gross Merchandise Value (GMV) and gross profit forecasts. More significantly, this translates to a 5% and 7% increase in EBIT projections for 2026 and 2027, respectively, underscoring expectations for enhanced profitability. The firm also anticipates a ~3% lift in advertising segment forecasts for the same period, while maintaining a 16% growth estimate for AWS in Q2 2025. Concurrently, Amazon's planned capital expenditures for 2025 have been increased to $112 billion, signaling continued aggressive investment in its infrastructure. However, the competitive landscape remains intense, highlighted by Google Cloud securing a $1.2 billion deal with ServiceNow, a direct challenge to AWS's market dominance. Geopolitically, Amazon is navigating rising US-China tensions by closing its Shanghai AI laboratory, a strategic move that mitigates regulatory risk but may impact its R&D presence in the region.

Key Decisions for Investors

• The dual price target upgrades from UBS and Deutsche Bank, driven by upward revisions to EBIT and GMV, reinforce a bullish outlook for Amazon's core profitability and stock performance.
• Investors should monitor competitive dynamics in the cloud sector, as Google's significant contract win with ServiceNow signals intensifying pressure on Amazon's high-margin AWS division.
• The closure of the Shanghai AI lab highlights a tangible risk from US-China geopolitical tensions, which could affect Amazon's global operations and talent acquisition strategies going forward.
• Note the increased 2025 capital expenditure forecast of $112 billion, which, while potentially weighing on near-term free cash flow, is a crucial indicator of the company's commitment to long-term growth.