Wall Street Boosts Amazon Targets After 15 Percent Stock Surge

Amazon stock jumped over 15 percent on Friday to close at $271.58 after the company published its second quarter report on July 30. Total sales reached $200.6 billion, beating analyst expectations of $197 billion. Profits also came in much higher than forecasts, driven largely by Amazon Web Services. The cloud division grew by nearly 37 percent to $42.2 billion, marking its fastest growth pace in over four years.

Following the strong report, more than a dozen major banks rushed to raise their price targets for the stock. Benchmark raised its target to $400, calling it one of the best quarters in a decade. JPMorgan moved its target to $365, pointing to a massive cloud backlog of $496 billion. Other firms including Rosenblatt, TD Cowen, and Truist also adjusted their targets upward.

Despite the excitement, analysts pointed out potential challenges ahead. Amazon is currently burning cash as it funds heavy investments in data centers and artificial intelligence chips. Chief Executive Andy Jassy plans to spend about $220 billion this year on infrastructure. Traders should watch how management plans to fund these massive outlays and whether the heavy spending converts into steady cash flow in the coming quarters.