Wall Street is bullish on Amazon earnings despite uncertainty around consumer spending, rising investment costs

• Wall Street analysts expect Amazon to present an net hit erstwhile it reports quarterly results connected Thursday
• Expanding maturation successful Amazon's unreality level is simply a bullish driver, analysts said.
• Yet, slowing user spending and investments by nan institution successful different areas could beryllium headwinds.

Wall Street is gearing up for Amazon to present beardown quarterly financial results aft nan closing doorbell connected Thursday, though uncertainty lingers astir really nan institution mightiness navigate a slowdown successful user spending.

Most analysts expect coagulated net and further upside for Amazon stock, driven by its unreality level and advertizing strength. Yet, concerns linger complete slowing unit margins and Amazon's rising investments successful different areas of its business.

That includes Project Kuiper, Amazon's inaugural to deploy thousands of satellites for an accrued broadband network, arsenic good arsenic investments successful AI.

Here's what analysts are saying up of nan company's earnings.

CFRA: Searching for finance balance

CFRA considers Amazon a compelling multi-year profit and cashflow story, but nan patient is cautious astir near-term prospects.

"Growth whitethorn not beryllium linear owed to a tepid user spending environment, lumpy AWS woody volume, and accelerated investments successful areas for illustration Project Kuiper, generative AI, same-day fulfillment, and Prime Video integer content."

Analyst Arun Sundaram said this will construe into a "modest" third-quarter net beat. CFRA expects gross to emergence 10.5% year-over-year and GAAP operating profit to climb 36%. CFRA's estimates are astatine nan precocious extremity of Amazon's guidance range.

"Overall, investors will beryllium looking for AMZN to onslaught nan correct equilibrium of maturation vs. investments," Sundaram said.

The statement said that while Amazon's operating margins are expected to proceed increasing into 2025, reinvestment into different areas of nan business will slow this description .

CFRA trimmed its Amazon value target to $219 a stock connected October 21, indicating 13% upside ahead.

Bank of America: Mixed results incoming

BofA's Justin Post suggested investors brace for a mixed container of third-quarter results.

Bank of America views statement gross estimates arsenic excessively precocious and predicts $157 cardinal for nan quarter. However, nan bank's outlook for operating profit stands supra statement views astatine $15 billion.

The slope expects nan quarter's starring maturation drivers will see Amazon Web Services, nan firm's AI-led cloud-computing platform. According to Post, margins present will apt beryllium amended than Wall Street is expecting

"AI request apt improved further successful 3Q, and we deliberation investors whitethorn beryllium expecting 20% y/y maturation for 3Q, which would propose nan largest 3Q successful position of sequential dollars added astatine $1.39bn," he said.

Consumer spending uncertainty could beryllium a concern, and BofA expects a flimsy deceleration successful discretionary unit income growth.

The patient has a "buy" standing connected nan banal and a $210 value target, which implies an 8.3% summation from existent levels.

JPMorgan: AWS acceleration leaves room for optimism

JPMorgan cited Amazon's expanding unreality level and coagulated shop maturation arsenic cardinal reasons to beryllium bullish connected nan stock.

The slope said easing optimizations, workload migrations, and AI's increasing monetization will support further AWS acceleration done this year, starring to 20% maturation year-to-date.

In statement pinch Bank of America, nan patient anticipates third-quarter nett income to scope $157 billion, beneath statement estimates of $157.3 billion.

Meanwhile, unit profits successful nan past 4th faced headwinds, and consumers look cautious astir spending. Shoppers eager for a woody are weighing connected Amazon's mean trading prices, nan slope said.

JPMorgan has an "overweight" standing connected Amazon and a $230 value target. This suggests an 18.6% upside from existent levels.

Wedbush Securities: Don't interest astir rising finance costs

Wedbush Securities has shouted Amazon's increasing unreality conception and a gross displacement toward high-margin advertising. Together, these should thief offset headwinds brought connected by nan company's spending connected investments elsewhere.

"We deliberation nan risk/reward is charismatic heading into results arsenic investor expectations for 2H profitability person moderated, AWS maturation continues to accelerate, and advertizing momentum is building into 2025," a squad of analysts led by Scott Devitt wrote.

The patient said investors person toned down separator expectations owed to Amazon's spending successful caller finance areas, specified arsenic Project Kuiper. While this whitethorn require much finance from nan institution complete time, Wedbush doesn't expect it to effect profitability successful nan near-term.

Wedbush reiterated its "outperform" standing and $225 value target, implying a 16% summation from existent levels.

Morgan Stanley: Bullish into 2025

Analysts led by Brian Nowak focused connected Amazon's fourth-quarter guidance, suggesting that nan company's net earlier liking and taxes mightiness travel successful little than expected.

"We spot AMZN's precocious and increasing attraction connected lower-priced, lower-margin essentials driving merchandise separator pressure... which is holding backmost nan near-term slope of its N. America unit profit ramp. Expected discounting successful a competitory vacation play (and picky discretionary consumer) create further near-term uncertainty," they said.

The slope expects fourth-quarter EBIT of astir $17.5 billion, 1% beneath statement expectations.

But looking guardant to 2025, nan slope recommends sticking pinch nan banal arsenic unit pressures will beryllium a short-term headwind. Corporate efficiencies and shipping costs will make lower-priced essentials profitable for nan institution done adjacent year, nan slope projected.

Morgan Stanley has a $210 value target for nan stock, representing upside of astir 8% from Wednesday's stock price.