Here are the latest share price forecasts for S&P 500 giant Amazon

Amazon has generated monster gains for investors over the last decade. And Wall Street analysts believe the S&P 500 stock can continue to rise from here.

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S&P 500 powerhouse Amazon‘s(NASDAQ: AMZN) having a great run. Year to date, the stock’s up about 29%. As a long-term investor in the tech company (it’s the largest individual stock holding in my portfolio right now), I’m pretty happy with that performance.

Is there scope for further share price gains? Wall Street analysts seem to think so. Here’s a look at their latest share price forecasts.

Brilliant Q3 earnings

Before focusing on the share price targets, it’s worth touching on Amazon’s recent Q3 earnings. That’s because they were excellent.

I’ve been saying for a while that Amazon’s profits are going to explode higher at some point, and this was seen in the Q3 numbers. While net sales only increased 11% year on year to $159bn, operating income jumped from $11.2bn to $17.4bn – a 55% increase. Meanwhile, earnings per share came in at $1.43 versus $0.94 a year earlier – up 52%.

Breaking the sales figure down, there was 19% growth from the all-important cloud computing division (AWS). There was another 19% gain from digital ads (Amazon’s now the third largest player in the digital advertising space behind Meta and Alphabet).

Looking ahead, the company told investors that net sales are expected to range $181.5bn-$188.5bn this quarter (growth of 7-11%). It expects operating income of $16bn-$20bn, compared with $13.2bn in the fourth quarter of 2023.

Overall, there was a lot to like in the results.

New share price targets

It’s therefore no surprise that loads of Wall Street analysts have increased their price targets for the stock in recent days. I’ve listed their new targets in the table below.

BrokerNew targetOld target
Raymond James$230$205
Morgan Stanley$230$210
Baird$220$213
Benchmark$215$200
BMO$236$230
BofA Global Research$230$210
Citi$252$245
Deutsche Bank$232$225
HSBC$225$220
Jefferies$235$225
JP Morgan$250$230
MoffettNathanson$235$229
Oppenheimer$230$220
Piper Sandler $225$215
RBC$225$215
Rosenblatt Securities $236$221
Roth MKM$220$215
Scotiabank$246$245
Stifel$245$224
Susquehanna$230$220
Telsey Advisory Group$235$215
Truist Securities$270$265
UBS$230$223
Wedbush$250$225
Oppenheimer$230$220

As you can see, a lot of brokers have hiked their price targets. Of the brokers listed, Truist has the highest target at $270. The average of the price targets in the table is $234, 19% above the current share price.

I’m looking for $250

My own price target for Amazon stock’s $250. I reckon it can get there over the next 12 months or so.

My thesis revolves around three key factors. The first is earnings growth. Next year, earnings per share (EPS) are projected to grow by 20% to $6.00. I think there’s scope for 2025 earnings forecast upgrades, however.

The second is the valuation. Currently, the price-to-earnings (P/E) ratio using the 2025 EPS forecast is just 32. That’s pretty much a historical low for Amazon so I see room for a higher valuation.

The third is the fact that the stock’s lagged the other Big Tech shares in recent years. So it could have some catching up to do. It’s worth noting here that compared to the other Big Tech stocks, Amazon’s under-owned by professional fund managers.

In summary, I think the stock can rise as earnings climb and the valuation moves higher.

Of course, there are no guarantees. Amazon may need to spend more than expected on artificial intelligence infrastructure and this could hit its earnings. Another risk is a slowdown in consumer spending and lower growth in its e-commerce division.

Taking a medium-term view however, I see potential for strong gains.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Edward Sheldon has positions in Alphabet and Amazon. The Motley Fool UK has recommended Alphabet, Amazon, HSBC Holdings, and Meta Platforms. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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