AMZN, AAPL: Goldman Sachs Boosts Price Targets on These 2 ‘Magnificent 7’ Stocks after Solid Earnings Beat

Tech giants Amazon and Apple posted stronger-than-expected earnings, with Amazon reporting Q3 EPS of $1.95 on $180.2 billion revenue driven by AWS and advertising, and Apple achieving Q4 EPS of $1.85 on $102.5 billion revenue from steady iPhone demand and services growth. Goldman Sachs subsequently reaffirmed its "Buy" ratings, raising price targets to $290 for Amazon, citing AI-driven AWS demand and operational efficiency, and to $320 for Apple, anticipating a multi-year upgrade cycle fueled by AI features and new product designs. Both stocks saw pre-market gains, reflecting investor confidence in their continued growth trajectories.

Analysis

Amazon (AMZN) and Apple (AAPL) both reported stronger-than-expected earnings, driving pre-market gains and reflecting robust underlying business performance. Amazon's Q3 EPS of $1.95 significantly beat estimates of $1.57, with revenue reaching $180.2 billion, primarily fueled by its AWS cloud and advertising segments. Apple posted fiscal Q4 EPS of $1.85, a 13% year-over-year increase, on $102.5 billion in revenue, supported by consistent iPhone demand and strong services growth.

Goldman Sachs reaffirmed its "Buy" ratings for both tech giants, raising Amazon's price target to $290 from $275 and Apple's to $320 from $279. For Amazon, Goldman cited the growing demand for AI tools benefiting AWS, alongside increasing efficiency in its retail and delivery networks, and the high-margin growth of its advertising unit. Apple's outlook is bolstered by expectations of a multi-year product upgrade cycle driven by new AI features and potential product innovations.

Amazon's strategic focus on its high-growth AWS and advertising businesses is expected to drive continued sales and margin improvements, leveraging AI demand. Apple's services revenue, which rose 15% year-over-year, also contributes significantly to its strong margins, further enhanced by a richer product mix and in-house technology. While TipRanks shows Amazon with a "Strong Buy" and 20.8% upside, Apple holds a "Moderate Buy" with a modest 2.7% downside from current levels.

Key Decisions for Investors

• Investors should consider maintaining or initiating long positions in both Amazon and Apple, given their robust earnings, positive analyst outlooks, and strategic leverage in AI and high-margin services.
• Closely monitor Amazon's AWS and advertising segment growth for continued margin expansion, and Apple's progress on AI feature integration and new product cycle developments.
• Factor in the analyst consensus indicating Amazon's higher projected upside potential (20.8%) compared to Apple's more modest outlook (2.7% downside), which may inform portfolio weighting.