Amazon Shares Surge 14% After Earnings, JPMorgan Lifts Target to $365

Amazon.com Inc. shares surged roughly 14% in early trading Friday after the e-commerce and cloud giant delivered quarterly results that eased investor concerns over AI spending and slowing cloud growth. The rally lifted the broader technology sector, with the Nasdaq Composite rising 0.34% and the S&P 500 gaining 0.12% in early trade.

JPMorgan raised its price target on the stock to $365 from $330, maintaining a “buy” rating. The revised target implies nearly 40% upside from Friday’s opening price, with the Wall Street brokerage citing expanding margins, accelerating AI monetization and resilient cash flows as key drivers for further gains, according to a report from NDTV Profit.

**AWS Strength and AI Momentum**

Amazon Web Services (AWS) delivered cloud revenue that exceeded analysts’ expectations for the June quarter, though specific figures from sources conflicted. One report from NDTV Profit put AWS revenue at $42.23 billion, ahead of a $40.54 billion consensus. Another NDTV Profit report placed AWS revenue at $30.5 billion, ahead of expectations of about $29.7 billion. The company reported its fastest quarterly cloud-unit growth since 2021, according to NDTV Profit, while a Reuters report cited by a third source said Amazon posted its strongest quarterly revenue growth in more than four years.

Investors focused on accelerating growth rather than a sharp decline in free cash flow reported alongside the earnings. “Amazon showed us, without a shadow of a doubt, that the web-services or AI side of the business is driving growth for the company,” Adam Sarhan, chief executive of 50 Park Investments, told Reuters, as cited in one source. “Investors are able to look past the free-cash-flow decline because it is one component. If growth continues, it will make up for that shortfall.”

AWS’s AI business and proprietary chips attracted over $25 billion in annualized revenue, surging more than twofold compared with a year ago, NDTV Profit reported. NDTV Profit separately reported that AWS generated operating income of $11.2 billion, translating into an operating margin of 36.7%, reinforcing its position as Amazon’s biggest profit engine. The brokerage also highlighted Amazon’s proprietary AI chips, including Trainium 2 and Inferentia, and pointed to the company’s strategic partnership with Anthropic as a catalyst for higher enterprise AI adoption on AWS.

Net income for the quarter rose to $35.77 billion, or $4.81 per share, from $27.23 billion, or $3.65 per share, a year earlier, according to one NDTV Profit report.

**Market Reaction and Broader Context**

Amazon’s surge lifted the S&P 500 consumer discretionary sector by 5.2%, leading the market. However, gains on the broader indexes were tempered by a 9.8% drop in Apple shares after the company warned that supply constraints would weigh on growth.

Other Big Tech names also advanced. Microsoft shares rose 1.8% after recording their biggest single-day gain on record in the prior session. Alphabet and Meta each added more than 2%. Among semiconductor stocks, Nvidia climbed 1.3% and Micron added 1.6%.

Despite the late-week rebound, the S&P 500 and the Nasdaq remained on track to end July in negative territory after a steep selloff in AI-related stocks during the month. The week introduced fresh uncertainty over interest rates after the Federal Reserve kept its benchmark rate unchanged. Comments from Chair Kevin Warsh and a benign inflation report prompted traders to raise the probability of rates remaining unchanged in September to 35%, from about 18% a week earlier, according to CME’s FedWatch tool.

Later in the session, Wall Street indexes erased earlier gains. The S&P 500 turned down 0.4%, the Nasdaq fell 0.27%, and the Dow Jones Industrial Average dropped 0.34% as the yield on 10-year Treasuries advanced six basis points to 4.73%, NDTV Profit reported. The Bloomberg Dollar Spot Index rose 0.4%.