Amazon Stock Dip: Why Wall Street is Wrong

Amazon delivered strong Q2 performance across retail, AWS, and profitability. Despite a stock dip following earnings, the company's retail business showed 11% YoY growth in North America and 16% in international sales. AWS sales surged 17.5% to $30.9 billion. The stock remains reasonably valued and is expected to continue growing, making it a good buy at current levels.

Amazon.com Inc. (NASDAQ: AMZN) delivered a robust Q2 performance, with significant growth across its retail and AWS segments. Despite a recent stock dip following earnings, the company's retail business showed 11% year-over-year (YoY) growth in North America and 16% in international sales. AWS sales surged 17.5% to $30.9 billion, contributing to the parent company's strong financial performance. The stock remains reasonably valued and is expected to continue growing, making it a good buy at current levels.

The company's retail segment saw an 11% YoY growth in North America, driven by strong sales of $100.1 billion. Internationally, sales grew by 16% to $36.8 billion. These figures reflect Amazon's continued dominance in the retail sector, despite increasing competition. The company's AWS segment also performed exceptionally well, with a 17.5% increase in sales to $30.9 billion. This growth is a testament to the increasing demand for cloud computing services, which AWS continues to lead.

Amazon's Q2 net income of $18.2 billion, or $1.68 per diluted share, exceeded Wall Street expectations of $1.33 per share. The company's operating income from AWS reached $10.2 billion, highlighting the segment's profitability. CEO Andy Jassy noted that AI is affecting every part of Amazon's business, from Alexa+ to AI models such as Nova and DeepFleet. The company's continued investment in AI and data center infrastructure is expected to drive future growth.

Despite the strong performance, Amazon's stock experienced a dip following the earnings announcement. The stock lost 9.39% over the past five trading sessions, bringing its year-to-date loss to 3.68%. However, analysts have been upgrading their price targets for Amazon, reflecting optimism about the company's future prospects. The median price target of $265.05 is above Amazon's all-time high share price seen earlier this year, indicating potential upside.

Institutional investors hold a significant stake in Amazon, with 63.95% of shares owned by these entities. The company's strong fundamentals and growth prospects make it a popular choice among Wall Street's sell-side firms. The consensus rating for Amazon is "Strong Buy," with all but one analyst assigning a "Buy" rating.

Looking ahead, Amazon faces some headwinds, including ongoing labor issues and potential economic slowdowns. However, the company's strong performance in Q2 and the optimism from Wall Street analysts suggest that the stock is poised for further growth. The median price target indicates a potential upside of 24.79% from current levels, making Amazon a compelling investment opportunity.

References:
[1] https://247wallst.com/investing/2025/08/04/amazon-stock-price-prediction-where-will-it-be-in-1-year/
[2] https://www.constellationr.com/blog-news/insights/aws-q2-sales-growth-175-nears-124-billion-annual-revenue-run-rate