Amazon stock hit with major Wall Street downgrade

Core Viewpoint - Amazon's stock has been downgraded from 'Buy' to 'Neutral' by Rothschild Redburn, with a new price target set at $250, indicating a potential increase of about 7% from its last closing price of $232 [1][3]. Group 1: Downgrade Details - The downgrade is primarily due to a cautious outlook on Amazon's cloud division, AWS, which has been a significant growth driver for the company [3]. - Analyst Alex Haissl noted that while AWS had previously exceeded expectations, the competitive landscape has changed considerably, limiting further upside potential [3][5]. - Haissl compared Amazon's situation to that of Microsoft, highlighting that although AWS is more integrated into Amazon's business than Azure is for Microsoft, the rise of generative AI presents new challenges for profitability [4][5]. Group 2: Market Sentiment - Despite the downgrade, Amazon maintains strong support from Wall Street, with all 42 covering analysts holding a 'Strong Buy' rating and no 'Hold' or 'Sell' recommendations [6]. - Analysts project a significant upside for Amazon, with an average 12-month price target of $296.64, representing a potential gain of approximately 26.4% from the current stock value. Price targets range from a low of $255 to a high of $340 [8].