Amazon.com Upgraded to 'Strong-Buy' Amid Strong Earnings and Growth Prospects

Amazon.com (NASDAQ:AMZN) has received an upgrade from 'hold' to 'strong-buy' by stock analysts at Zacks Research, according to a research note issued on Tuesday. This change reflects Amazon's strong performance and growth prospects in various areas such as e-commerce, cloud computing, and artificial intelligence.

The company's recent earnings report showed exceptionally strong results, with revenue up 19.6% year over year to $200.61 billion, exceeding analysts' expectations of $197.03 billion. Adjusted earnings per share came in at $5.75, beating the consensus estimate of $1.82.

However, some concerns have been raised regarding Amazon's spending and margin pressures due to higher memory costs and its ambitious capital expenditure plan, which is expected to reach $220 billion by 2026. This has led to questions about the returns on investment in AI infrastructure and potential pressure on free cash flow.

The upgrade from Zacks Research reflects a positive sentiment towards Amazon's future prospects, driven by strong demand for cloud computing capacity and higher memory-chip prices. Additionally, Amazon's autonomous-vehicle unit, Zoox, is approaching commercial operations with plans to begin paid robotaxi rides in Las Vegas on August 10.