Analysts from Goldman Sachs (GS) remain firmly in the bullish camp when it comes to the e-commerce giant, Amazon (AMZN) even as the company’s shares have declined by around 7% in the past month. The fall in the company’s stock has been due to investors’ concerns about a slowdown in its Amazon Web Services (AWS) segment.
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In Q4 2022, AWS revenue increased 20% year-over-year to $21.4 billion. Although a 20% growth seems substantial, investors have seen the AWS business growing at a much faster pace.
Top-rated analyst Eric Sheridan believes that these concerns could be overwrought and the company’s margins could improve in FY23. As a result, AMZN remains “solidly our top pick for the remainder of 2023 from current trading levels.”
The analyst’s view regarding the growth of AWS over the long term remains unchanged and he commented, “In particular to AMZN, any visibility into a bottoming of AWS growth would likely be a key catalyst for the shares & increased industry conversations in the past few weeks point to signs that the optimization theme (in terms of changed customer behavior) may have peaked around 2023 economic concerns and budget planning in late 2022.”
Besides Sheridan, other analysts are also upbeat about AMZN stock with a Strong Buy consensus rating based on 36 Buys and two Holds.
