Goldman Sachs expects Amazon's stock price to react negatively after earnings, with a target price of $300

Goldman Sachs released a report expecting that Amazon (AMZN.US) will have a negative reaction in its stock price after disclosing its performance for the fourth quarter of 2025, as the situation presented in this performance is more complex than expected compared to some key themes that have driven investor discussions over the past few months. Both the Generally Accepted Accounting Principles operating profit and the guidance for operating profit in the first quarter of this year fell short of expectations, raising market doubts about the long-term profitability development path of its North American and international retail businesses.

At the same time, the bank believes that Amazon AWS performed strongly, but its growth potential needs further validation; advertising revenue continues to be strong and exceeds the bank's expectations. However, Amazon's guidance for capital expenditures in fiscal year 2026 is approximately $200 billion, far exceeding the bank's expected level of $160 billion, raising two core questions: when will the company's massive investment in AI lead to a leap in year-on-year growth for AWS, and how will the newly added computing capacity be allocated between internal use and external customer demand in the coming years.

Goldman Sachs set a target price of $300 for Amazon; rating "Buy." The bank expects that during Amazon's earnings call, investors will focus on several key areas, including the performance of Amazon AWS under the broader theme of artificial intelligence over the next 12 months and beyond, and how to view the upcoming computing capacity. In terms of consumer business, the focus will be on the overall health of Amazon consumers and the major opportunities and challenges facing e-commerce cost optimization measures (such as tariffs, efficiency, automation, robotics technology, and physical artificial intelligence) in the next 12 to 18 months