AMZN Stock Still A Buy, Says BofA — Even Amid Lofty Valuation

Bank of America Securities (BofA) has reaffirmed its Buy rating on Amazon.com Inc. AMZN stock, maintaining a steady price target of $225.00.

What Happened: BofA Securities has maintained its Buy rating on Amazon, even as the e-commerce giant continues to trade at an increasing price-to-earnings (P/E) ratio discount relative to Walmart Inc. WMT. The firm highlighted that Amazon is currently valued at 23 times its estimated 2026 GAAP P/E, reported Investing.com.

Amazon’s recent underperformance against Walmart and Microsoft Corporation MSFT was attributed to factors such as higher exposure to the Chinese market and a smaller emphasis on grocery sales. However, Amazon’s cloud computing arm, AWS, was mentioned as a potential drag on the company’s valuation.

BofA Securities also highlighted mixed investor sentiment, ranging from short-term optimism following Amazon CEO Andy Jassy‘s recent interview to worries about how tariffs and a possible economic slowdown could affect the company’s retail and advertising businesses.

Despite these concerns, BofA Securities maintains confidence in Amazon’s strategic position. By reaffirming its Buy rating, the firm signals an ongoing optimistic view of the company's stock performance.

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Why It Matters: Amazon’s stock has been under pressure in recent times. Year-to-date, the company’s shares fell over 24% and the stock took another hit when an analyst from Raymond James downgraded the stock from Strong Buy to Outperform on Monday and lowered the price target from $275 to $195, well below the Street’s average of about $255.

Further, Amazon followed in the footsteps of Microsoft and paused some of its data center leasing talks, especially in international markets. This move, coupled with the tariff-induced uncertainty, has led to concerns about the company’s future performance.

Amazon holds a Growth rating of 94.13% and a quality rating of 68.24%, according to Benzinga's Proprietary Edge Rankings. The Benzinga Growth metric evaluates a stock’s historical earnings and revenue expansion across multiple timeframes, prioritizing both long-term trends and recent performance. For an in-depth report on more stocks and insights into growth opportunities, sign up for Benzinga Edge.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.