Goldman Sachs' report predicted that Amazon's (AMZN.US) stock price will react negatively following the disclosure of its 4Q25 results. This was attributable to the complexity of the results compared to key themes that have been driving investor debates in the past few months. Both the GAAP operating income and the guidance for 1Q26 operating income fell short of expectations, sparking concerns about the long-term profitability trajectory of its North American and international retail operations.

The broker also noted that Amazon's AWS fared strongly, but its growth potential requires further validation. The ads revenue remained robust and exceeded the broker's expectations. However, Amazon's capex guidance for 2026 is approximately USD200 billion, far above the broker's expected USD160 billion level. This raises two core issues: when Amazon's substantial AI investments will lead to a leap in AWS's YoY growth, and how the additional computing capacity in the coming years will be allocated between internal use and external customer demand.

Goldman Sachs set a target price of USD300 for Amazon and assigned a Buy rating.
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AASTOCKS Financial News
Website: www.aastocks.com

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