TLDR
- Wall Street analysts have cut Amazon price targets and earnings estimates ahead of Q1 results
- Wedbush lowered price target from $280 to $225, citing macroeconomic concerns
- Amazon stock is down 18% this year, trading 26% below February peak
- Despite short-term headwinds, analysts maintain a Strong Buy consensus
- Long-term growth potential remains strong across cloud computing, e-commerce, streaming, and digital advertising
Amazon’s stock has taken a hit in recent weeks as several top Wall Street analysts have reduced their price targets and earnings estimates ahead of the company’s first-quarter results. Despite the current downturn, many continue to view the tech giant as a solid long-term investment.
The stock is currently trading 26% below its February peak, presenting what some see as a buying opportunity. Year-to-date, Amazon shares have dropped 18%, largely due to concerns over tariffs and their potential impact on the company’s global supply chain.
Wedbush analyst Scott Devitt has taken a more cautious stance, lowering the firm’s price target for Amazon from $280 to $225. He also trimmed Q1 net income estimates by approximately 3%.
The firm didn’t stop there. Wedbush reduced its 2025 revenue forecasts by 2%–6% and EBITDA/operating income by 5%–10%. Devitt described the current situation as a “dense fog” and indicated that further estimate updates might follow after hearing from company executives.
Wall Street Takes a Step Back
Wedbush isn’t alone in its reassessment. TD Cowen also trimmed its estimates earlier this month, citing broader macroeconomic concerns. The firm lowered its revenue, operating income, and earnings projections by around 1% for 2025.
Looking further ahead, TD Cowen cut its 2026–2030 estimates by 3–4%, reflecting expectations of softer consumer spending amid higher-than-expected tariffs and other economic headwinds.
John Blackledge, a top-rated analyst at Cowen, reduced his price target on Amazon stock from $255 to $240 while maintaining a Buy rating. In a similar move, Morgan Stanley’s Brian Nowak lowered his price target by 10% to $245.
Despite these short-term concerns, Wedbush’s revised price target still suggests an upside of over 25% from current levels. The broader Wall Street consensus remains strongly positive as well.
According to market data, Amazon stock has a Strong Buy consensus rating based on 45 Buys and just one Hold assigned in the last three months. The average price target of $256.19 implies a potential upside of 42.6% from current levels.
Long-Term Growth Potential
Looking beyond immediate concerns, Amazon’s long-term growth narrative remains compelling. Over the past decade, the company’s revenue has surged by an impressive 617%. Last year alone, the business generated $638 billion in net sales.
Wall Street analysts project that Amazon will increase its top line at a compound annual rate of 9.7% over the next three years. This represents healthy growth for a company of Amazon’s massive size.
The optimism stems from Amazon’s exposure to multiple growth markets. The company operates in cloud computing, online shopping, streaming entertainment, and digital advertising—all sectors expected to expand substantially over the next two decades.
Amazon’s improved focus on cost controls and organizational efficiencies has also boosted its bottom line. Operating income increased by 462% in the past two years, showcasing the company’s profit potential.
The company’s competitive strengths remain formidable. Its scale allows for heavy investment in supply chain infrastructure, creating cost advantages. The marketplace benefits from network effects, with more shoppers attracting more merchants in a positive feedback loop.
Amazon Web Services, the company’s cloud computing division, maintains its industry-leading position. The platform benefits from cost advantages and customer switching costs, while building a technical edge in data collection that supports AI tool development.
Investors should note that Amazon’s current price-to-sales ratio of 3 sits below its trailing five- and 10-year averages, suggesting a reasonable valuation despite long-term growth prospects.
Of course, risks persist. Regulatory scrutiny of Amazon’s market power continues to intensify. The company faces strong competition across all business segments, requiring constant innovation. Labor relations remain an ongoing concern for a company with such a large workforce.
In the short term, all eyes will be on Amazon’s upcoming Q1 earnings report, which could provide clarity on how these various headwinds are affecting the company’s actual performance.
For now, the most recent analyst actions suggest caution in the near term, but continued confidence in Amazon’s long-term trajectory.
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