Amazon.com Inc. shares jumped 15.1 percent to $271.11 on Friday, the e-commerce and cloud giant's largest single-day gain since 2012. The move followed a second-quarter earnings report that beat analyst expectations across the board and lifted the Nasdaq Composite 0.5 percent to 25,236.
Amazon reported Q2 revenue of $162.5 billion, topping consensus estimates of $158.9 billion. Amazon Web Services revenue rose 23 percent year-over-year to $26.8 billion, signaling a re-acceleration in cloud spending. AWS operating income climbed 30 percent from the prior year to $8.1 billion. North America retail sales rose 12 percent to $99.3 billion, driven by Prime Day and logistics improvements.
We maintain a Strong Buy rating on Amazon with a price target of $320, representing 18 percent upside from current levels. The AWS re-acceleration is the primary catalyst, fueled by enterprise cloud migrations and rising demand for AI workloads. CEO Andy Jassy said "every customer conversation now includes AI," driving new AWS commitments. Amazon's generative AI investments position it for continued market share gains.
Amazon's profitability improvements across retail and advertising provide a resilient earnings base. Cost discipline and fulfillment network optimization are translating into higher customer engagement and repeat purchases. Rivals Microsoft, up 0.6 percent to $453.79, and Alphabet, up 5.2 percent to $350.86, also benefit from cloud and AI growth, but Amazon's integrated ecosystem spanning e-commerce, cloud and advertising gives it a distinct competitive edge.
Amazon guided Q3 revenue of $167 billion to $172 billion, pointing to sustained momentum. Investors should watch the company's Oct. 15 Investor Day for details on its AI strategy and capital expenditure plans. We expect continued double-digit AWS growth through 2025.
