On Tuesday, Mizuho Securities sustained its Outperform rating on Amazon.com, Inc. (NASDAQ:AMZN) with a steady price target of $240.00. The affirmation follows a comprehensive quarterly survey of Amazon Web Services (AWS) customers, which revealed several positive trends in the cloud computing segment of the company.
The survey, conducted with a prominent channel partner, indicated an accelerated sales cycle for AWS, driven by increased demand from European Central Bank (ECB) meetings and a rise in companies moving away from data center contracts. Additionally, the spending mix for the fiscal year 2024 remained largely consistent, with a notable shift towards infrastructure investment. This shift suggests a robust pipeline for workload migration and database upgrades.
The findings of the survey led to an updated forecast for AWS's fiscal year 2024 spending growth, now expected to increase from 20% to 22% year-over-year. This growth is attributed to improvements in core consumption and a complete offset in cost optimization efforts. Furthermore, the survey highlighted that General Artificial Intelligence (Gen-AI) projects are approaching a significant turning point, with models intended for external use anticipated to reach commercial deployment within six months.
Mizuho's analysis concluded with reinforced confidence in AWS's acceleration and an expectation for revenue growth to surpass the consensus estimate, maintaining a forecast of 20%. Amazon.com remains a Top Pick for Mizuho Securities, with a reiterated price target of $240.00, reflecting the firm's positive outlook on the company's performance in the upcoming year.
In other recent news, Amazon is developing a new carbon offset standard, named Abacus, in collaboration with carbon registry Verra. The initiative aims to meet Amazon's 2040 net-zero greenhouse gas emissions target and address the limited supply of quality-labeled offsets. This move has drawn concerns about potential market confusion and a lowering of offset standards. Other tech giants, including Alphabet (NASDAQ:GOOGL), Meta (NASDAQ:META), Microsoft (NASDAQ:MSFT), and Salesforce (NYSE:CRM), have shown interest in purchasing Abacus-certified credits.
Nvidia (NASDAQ:NVDA), a chipmaking company, briefly surpassed Microsoft in market value, although the peak was short-lived due to profit-taking activities and rising concerns over its high valuation. Meanwhile, Amazon.com Inc (NASDAQ:AMZN) reached a new financial height, joining the elite $2 trillion market value club, largely attributed to the growing excitement around AI technology's potential and applications.
The United States and India have extended their pause on retaliatory measures over India's digital-services tax until Sunday, coinciding with the deadline for a worldwide agreement aimed at reallocating taxing rights to the most profitable global companies. The extension aligns the U.S.-India agreement with similar accords with six other countries that had established digital-services taxes.
Rivian (NASDAQ:RIVN), an electric vehicle maker supported by Amazon, is set to provide shareholders with insights into the company's future models and its strategies for cost reduction during its investor day. This event follows a significant $5 billion investment from Volkswagen (ETR:VOWG_p), which grants access to Rivian's electric vehicle technology.
InvestingPro Insights
Amid Mizuho Securities' optimistic outlook on Amazon.com, Inc. (NASDAQ:AMZN), real-time data from InvestingPro aligns with the positive sentiment. Amazon's market capitalization stands at a robust $2.05 trillion, signaling strong investor confidence. The company's P/E ratio is currently at 54.24, reflective of its high earnings multiple, a metric often associated with growth expectations. Furthermore, Amazon's revenue growth over the last twelve months as of Q1 2024 is reported at 12.54%, demonstrating a solid upward trajectory in its financial performance.
InvestingPro Tips highlight Amazon as a prominent player in the Broadline Retail industry, with cash flows that can sufficiently cover interest payments, indicating financial stability. Additionally, analysts predict the company will be profitable this year, which is supported by a profitable track record over the last twelve months. For investors looking to delve deeper into Amazon's financials and future prospects, there are over 10 additional InvestingPro Tips available, which can be accessed with the coupon code PRONEWS24 for up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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