Citi raises Amazon stock price target to $265 on AWS growth outlook

Citi has raised its price target on Amazon (AMZN) to $265 from $225, maintaining a Buy rating ahead of its Q2 earnings, anticipating results to exceed consensus driven by expected acceleration in AWS revenue growth in H2 2025 and improving retail trends. This positive outlook, shared by other analysts, highlights Amazon's strong position in cloud computing and e-commerce, though recent AWS job cuts and lawmaker scrutiny over submarine cable infrastructure add to the multifaceted business landscape.

Analysis

Ahead of its second-quarter 2025 earnings, Amazon.com (AMZN) is receiving strong bullish signals from analysts, highlighted by Citi raising its price target to $265.00 from $225.00. The positive outlook is primarily predicated on two factors: an expected acceleration in Amazon Web Services (AWS) revenue growth in the second half of the year, driven by recent infrastructure build-outs, and improving trends in the retail segment. The retail business is expected to benefit from the Back-to-School season, growing advertising demand, and enhanced operational efficiencies from AI and robotics, contributing to the company's impressive 10.08% revenue growth over the last twelve months. This sentiment is broadly shared, with Cantor Fitzgerald and JMP Securities also citing AWS and advertising growth as key drivers for their respective $260 and $285 price targets. However, the narrative contains points of caution. The company has executed job cuts within its highly profitable AWS division, and JMP noted slower-than-expected Prime Day sales. Furthermore, Amazon faces a new geopolitical headwind in the form of scrutiny from U.S. lawmakers over its use of submarine communications cables serviced by Chinese and Russian entities, which introduces a potential security risk.

Key Decisions for Investors

• Investors should focus on the upcoming Q2 earnings report for confirmation of the bullish thesis, specifically watching for AWS revenue growth figures and management's commentary on the expected H2 2025 acceleration.
• It is prudent to monitor the emerging geopolitical risk associated with the U.S. lawmaker inquiry into submarine cable security, as this could have long-term regulatory or operational implications.
• With analyst price targets from Citi ($265) and JMP ($285) implying significant upside from the current $229.30 level, investors could consider the stock favorably positioned, but should predicate new positions on the Q2 results validating the strong growth outlook.