Amazon Stock Down, Analysts Say Buy the Dip

Amazon shares fell after quarterly results, but analysts say to buy the dip. AWS underwhelmed investors, but analysts say traders shouldn't be scared off by Amazon's growing investments in AI infrastructure. JPMorgan, UBS, and Citi raised their price targets, citing continued demand strength and Amazon's history of good capital allocation.

Title: Amazon Shares Fall After Q2 Results, Analysts Advise 'Buy the Dip'

Amazon (AMZN) shares plunged following the company's second-quarter results, with investors disappointed by the performance of Amazon Web Services (AWS). The stock dropped more than 6% in premarket trading on Friday [1]. Despite the slump, several analysts have advised investors to "buy the dip," citing continued demand strength and Amazon's history of good capital allocation.

JPMorgan analysts, for instance, raised their price target to $265 from $255, suggesting a 23% upside. They attributed the stock's decline to AWS's underperformance compared to rival cloud offerings from Microsoft (MSFT) Azure and Alphabet's (GOOGL) Google Cloud Platform. However, JPMorgan noted that AWS continues to be the primary driver of Amazon's capital expenditures, with the company investing $31.4 billion in the second quarter [1].

UBS analysts maintained a price target of $271 and argued that Amazon's growing capital expenditures are not a cause for concern. They believe that the company's investments in AI infrastructure are economically rational and necessary to support demand for AI services. Citi also raised its price target to $270, attributing the increase in investment to AWS's infrastructure capacity constraints being alleviated [1].

On the earnings call, CFO Brian Olsavsky mentioned that AWS is the primary driver of the company's capital expenditures. He stated, "AWS continues to be the primary driver, as we invest to support demand for our AI services" [1].

Analysts from various firms, including Goldman Sachs, JPMorgan, Citi, UBS, Bank of America, Barclays, Deutsche Bank, and Morgan Stanley, maintained their bullish stance on Amazon, with some even hiking their price targets. They cited Amazon's solid overall results, accelerating sales, and continued demand strength as reasons to remain optimistic. Additionally, they pointed to Amazon's investments in generative artificial intelligence as a forward catalyst for the stock [2].

Despite the mixed guidance, analysts believe that Amazon's shares are currently undervalued and present a compelling buying opportunity. They expect AWS to continue to grow and alleviate its infrastructure capacity constraints, which will drive the company's overall revenue growth.

References:
[1] https://www.investopedia.com/amazon-stock-is-falling-analysts-say-to-buy-the-dip-11783226
[2] https://www.cnbc.com/2025/08/01/analysts-stick-by-amazon-despite-sell-off-due-to-mixed-guidance.html