Can Amazon Stock Defy the Bears and Rise to $300?

Core Insights - The December quarter earnings season for the "Magnificent 7," excluding Nvidia, has concluded, with Meta Platforms showing significant gains while Microsoft and Amazon faced declines due to market concerns over tech companies increasing capital expenditures for AI [1] Group 1: Amazon's Performance - Amazon's stock price nearly dropped to $200 following mixed earnings results and a substantial increase in its 2026 capital expenditure [2] - Several brokerages, including Scotiabank and Morgan Stanley, have lowered Amazon's target price, with DA Davidson downgrading the stock from "Buy" to "Hold" and setting a new target price of $175 [2] - Amazon's average target price is $297.51, indicating a potential upside of over 42.5% from current levels, despite being the worst-performing stock in the Magnificent 7 for 2025 [3] Group 2: Earnings Snapshot - Amazon reported Q4 2025 revenues of $213.4 billion, a 14% year-over-year increase, surpassing both Street estimates and company guidance, but its earnings per share (EPS) of $1.95 fell slightly short of expectations [6] - The significant drop in Amazon's stock post-earnings is attributed more to the projected increase in its 2026 capital expenditure budget to $200 billion, which is significantly higher than last year's $131 billion and over $50 billion more than market expectations [7] - The market has reacted negatively to tech companies increasing capital expenditures without corresponding earnings growth, and Amazon is experiencing similar scrutiny [8]