UBS Raises Amazon Price Target to $348
UBS increased its price target for Amazon to $348, citing underestimated cloud margins and strong e-commerce growth ahead of third-quarter results.
UBS raised its price target for Amazon.com to $348 from $318 and reiterated a Buy rating on October 26. The adjustment comes ahead of the company's third-quarter results scheduled for October 29.
UBS analyst Stephen Ju argues that Wall Street is underestimating the 2027 operating margins for Amazon Web Services (AWS). Ju forecasts a 46% margin, significantly higher than the market consensus of 38%. While some investors express concern that capital expenditures exceeding $300 billion by 2027 could eliminate free cash flow, UBS contends that AWS revenue growth will outpace this spending.
The bank expects AWS to add approximately $80 billion in revenue and $20 billion in depreciation and amortization. Beyond cloud services, UBS identified Prime Video advertisements, same-day delivery, and grocery initiatives as primary drivers for faster margin expansion within the e-commerce sector.
