Benchmark Sees Turnaround Momentum for Amazon (AMZN) Into Holiday Quarter

Amazon.com, Inc. (NASDAQ:AMZN) is one of the AI Stocks Analysts are Tracking Closely. On October 22, Benchmark reiterated its Buy rating on the stock with a price target of $260.00. The firm remains bullish on the stock despite the numerous challenges Amazon has faced during the second half of the year.

It is particularly positive on the turnaround momentum building into the holiday quarter with long-term profitability tailwinds. The firm noted how profit expectations for Amazon have dropped for both 2025 and 2026. This is despite the continued positive momentum in network and fulfillment costs.

Amazon has also announced plans to replace 600,000 workers with robots by 2033, which pinpoints this ongoing operational shift.

“It has been a difficult back half of the year for perennial powerhouse Amazon (AMZN: Buy, PT $260), with yesterday’s 2.5% positive move finally pushing shares back into the green for the year. In fact, up until yesterday, Amazon was at risk of testing the near-term lows established after a disappointing AWS margin print in 2Q. As we predicted then, the profit bar dropped meaningfully both for 2025 and 2026 despite continued positive momentum in network and fulfillment costs, punctuated by yesterday’s announcement of plans to replace 600,000 workers with robots by 2033.”

“In addition, we have been one of the earliest and most vocal proponents of the eventual contribution from Amazon’s advertising and Prime Video ecosystem, which we continue to note should produce very strong margins at scale. Having covered the stock for almost two decades now, we get that the name tends to be a difficult own during investment periods like we are seeing now with DC buildouts and satellite launches pushing FCF into the red. However, even with consensus getting a bit peppier ahead of the all-important holiday quarter, we suspect the tide will turn sooner rather than later, with AWS growth reaccelerating and operating income margins resuming their upward trajectory. A major AI contract, which we are not anticipating but which we think is always on the table, would be icing on the cake.”

Amazon.com Inc. (AMZN) is an American technology company offering e-commerce, cloud computing, and other services, including digital streaming and artificial intelligence solutions.

READ NEXT: 10 AI Stocks Analysts Are Watching Closely and 11 Must-Watch AI Stocks on Wall Street

Disclosure: None.