Amazon Just Released Its Graviton5 CPU. Should You Buy, Sell, or Hold AMZN Stock Here?

Core Insights - Amazon's stock has experienced volatility in 2025, influenced by both growth catalysts and market challenges, with a year-to-date increase of 4.6% but a decline of 11.2% from its recent highs [1] - The company has evolved into a $2.45 trillion tech leader, dominating U.S. e-commerce and cloud computing through AWS, while expanding into various sectors including streaming, digital ads, and AI services [2] Financial Performance - Amazon's Q3 earnings report exceeded expectations, with net sales rising 134% year-over-year to $180.2 billion and EPS increasing 36.4% to $1.95, indicating a recovery in operational strength [7] - AWS revenue grew 9.4% year-over-year to $11.4 billion, with indications of accelerating demand [8] - For fiscal Q4, management projects revenue between $206 billion and $213 billion, with operating income expected between $21 billion and $26 billion [11] - Analysts forecast a 29.7% year-over-year increase in EPS for fiscal 2025, reaching $7.17, and a further rise to $7.84 in fiscal 2026 [12] Product Development and Strategy - The launch of the Graviton5 CPU marks a significant shift in Amazon's cloud strategy, enhancing its custom-chip capabilities and reducing reliance on external chipmakers [4][13] - Graviton5 offers 25% higher compute performance than its predecessor, reinforcing AWS's infrastructure and customer retention [13][15] - Amazon's AI initiatives are robust, with Trainium2 chip bookings increasing by 150% quarter-over-quarter, and the launch of Project Rainier showcasing its commitment to AI leadership [10] Market Sentiment and Analyst Outlook - Analysts express strong optimism regarding Amazon's future, with a consensus leaning towards a "Strong Buy" rating; 48 out of 55 analysts recommend this [18] - The average price target for AMZN is $297.09, indicating a potential upside of 29.7%, with some estimates as high as $360, suggesting a 57.2% increase [18] - Analysts from Bank of America and JP Morgan highlight AWS's potential for significant revenue growth, driven by advancements in AI and custom chip performance [16][17]