On Friday, TD Cowen adjusted its outlook on Amazon.com (NASDAQ:AMZN) shares, lowering the price target to $230 from $245, while still affirming a Buy rating on the stock. The revision follows Amazon's mixed financial performance in the second quarter, where revenue for its cloud segment, AWS, exceeded consensus by 1%, but its North America, International, and Advertising revenues did not meet expectations. The company's operating income, however, surpassed consensus by 6.9%.
The growth of AWS was a highlight, with a year-over-year increase of 18.7% in the second quarter, which the analyst attributes to ongoing cloud migration and the utilization of General Artificial Intelligence (GenAI). Looking ahead, Amazon provided its third-quarter revenue guidance in the range of $154 billion to $158.5 billion, marginally higher by 0.2% at the upper end compared to consensus estimates. However, the operating income forecast of $11.5 billion to $15 billion was slightly lower by 2.2% at the upper end against consensus figures.
In response to Amazon's guidance and recent performance, TD Cowen has made adjustments to its estimates and increased its capital expenditure expectations for the company. Despite the reduction in the price target, the firm maintains a positive outlook on Amazon's shares, indicating a continued belief in the stock's value proposition.
The market reacted to the mixed results and the updated analyst expectations, with Amazon's shares experiencing a 7% change in after-hours trading on the day of the announcement. The revised price target by TD Cowen reflects a cautious but optimistic view of Amazon's future performance, considering the company's strong position in cloud services and its potential for growth amidst global digital transformation trends.
In other recent news, Amazon.com Inc (NASDAQ:AMZN). has seen a flurry of analyst adjustments following its second-quarter earnings report. Piper Sandler reduced its price target to $215 from $220, maintaining an Overweight rating, despite concerns over Amazon's retail segment. Susquehanna reiterated its positive rating, citing the firm's 11% revenue increase year-over-year and a 19% growth in Amazon Web Services (AWS).
On the other hand, Snap Inc (NYSE:SNAP). witnessed a significant drop in its stock value, with shares declining 22% due to a grim forecast that exacerbated concerns over the company's competitive stance in the advertising industry. Analyst Rohit Kulkarni from Roth MKM expressed skepticism regarding the company's ability to maintain consistent performance over the next few quarters.
The Nasdaq Composite index experienced a significant drop, signaling a market correction as it now stands 10.2% lower than its peak. This downturn reflects growing investor concerns over the valuations of major technology companies and a potential slowdown in the economy.
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