UBS Raises Amazon (AMZN) Price Target to $279 Ahead of Thursday’s Earnings

Core Viewpoint - Amazon.com, Inc. is considered a strong investment opportunity in the AI sector, with UBS reiterating a "Buy" rating and raising the price target to $279 from $271 ahead of earnings, indicating confidence in a strong quarterly performance [1] Group 1: Earnings and Financial Outlook - UBS anticipates potential "noise" in Amazon's reported third-quarter operating income, with headline guidance for operating income possibly falling below consensus [1] - The focus is expected to be on the reported AWS growth rate, with year-over-year expectations set at 18% and potential for acceleration into Q4 2025 and 2026 [2] Group 2: Business Segments and Growth Potential - Analyst Stephen Ju highlights the potential for upside across Amazon's various business segments, including e-commerce, cloud, advertising, and Kuiper/low earth orbit satellites, although the timing for realizing these benefits remains uncertain [3] - Amazon's relative underperformance this year, with shares up only 4% year-to-date compared to its Internet megacap peers, presents a buying opportunity as the benefits of investments in e-commerce, AWS, content/advertising, and Kuiper are yet to be fully realized [4]