Analyst Rohit Kulkarni from Roth Capital Markets has reiterated a “Buy” rating for Amazon, assigning a target price of $250 per share in anticipation of the company’s third-quarter earnings report due on October 30. Kulkarni identifies Amazon as a leading choice among large-cap technology stocks as the year progresses.
In his analysis, Kulkarni has upgraded his expectations for Amazon Web Services (AWS) growth following a series of recent announcements regarding AI Cloud products that indicate increased customer engagement. He forecasts that AWS revenue growth will be 18.6% and 19.5% year-over-year in the second half of 2025, a rise from the previous estimate of 17.4% in the first half. This optimistic outlook is partially buoyed by Amazon’s investment in AI company Anthropic, which is expected to positively impact third-quarter earnings per share due to valuation adjustments.
Kulkarni highlighted key developments to watch for, including the upcoming Trainium 3 preview and updates on Project Rainier, which is expected to enhance AWS capacity. Trainium 3, expected to arise from a 3-nanometre processing technology, is projected to deliver double the performance of its predecessor, while Project Rainier’s rollout of data centers is anticipated to catalyze AWS growth significantly in the latter half of 2025.
However, there are concerns regarding Amazon’s retail segment as Kulkarni noted potential pressure on margins due to tariffs and the expansion of Project Kuiper, which has made significant strides with six launched missions and 153 satellites currently in orbit. He pointed out that the impact of pricing pressures has yet to be fully realized, and Amazon has not yet implemented substantial cost offsets.
Further, Kulkarni spoke on Amazon’s temporary halt of Google ad spending in July, characterizing it as a trial aimed at improving attribution and pricing strategies linked to updates in Amazon’s internal search tool, Rufus. As demand for both AI and non-AI cloud services continues to flourish, driven by generative AI applications transitioning from testing to practical application, the additional capacity from Project Rainier is envisioned to provide a transformative boost to AWS’s growth.
Looking ahead, Kulkarni predicts that by fiscal 2025, Amazon will achieve $165.1 million in Adjusted EBITDA on revenues of $707.9 million, progressing to $198.4 million on $782.1 million in fiscal 2026, revising previous estimates upward. This positive trend underscores Amazon’s potential as a frontrunner in the evolving tech landscape.