Key Stats for Amazon Stock
- Current Price: $248.00
- Target Price (Mid): ~$617
- Street Target: ~$332
- Potential Total Return: ~149%
- Annualized IRR: ~24% / year
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What Happened?
Some of the Nvidia (NVDA) server racks Amazon (AMZN) has taken delivery of are sitting in warehouses because the data centers meant to run them lack power, Business Insider reported on October 20. Amazon holds its third-quarter conference call at 5:00 p.m. ET on Thursday, October 29, its first chance to say how much of that capacity is switching on. Shares closed at $248.00 on October 23, 12.68% below their one-year peak on TIKR’s drawdown chart. AI financing worries hit hyperscaler stocks that week, though Amazon itself slipped less than 1%.
Early Rack Receipt Tests Amazon’s Own Spending Rule
On the July 30 call, CEO Andy Jassy said Amazon buys servers late on purpose: “We typically purchase these a few months before putting them into service, so we have strong visibility into customer demand before we trigger the spend.”
Business Insider’s report describes ownership moving earlier. Citing August internal emails, it said Amazon expected about $5 billion of Nvidia GB300 racks under a new Early Rack Receipt process, with roughly $3 billion more each month. It also said some sites had room for racks but not the power to run them. Amazon called staging hardware near deployment sites “best business practice” and disputed that it lacks a deployment plan.
The constraint described is power, not demand. Still, a rack in a warehouse earns nothing, and Jassy put the average break-even on servers and networking gear at a little under three years. Free cash flow was negative $7.69 billion in the second quarter per TIKR. Consensus sees around negative $34 billion for 2026 and around negative $8 billion for 2027, before free cash flow turns positive at around $38 billion in 2028. On the same July call, Jassy said Amazon was on track to double its 2025 power capacity by the end of 2027, the plan investors need updated on October 29.
TIKR tracks 60 analysts on Amazon. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Amazon, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Amazon’s Analyst Ratings
Amazon Usually Beats Its Own Ceiling. Q2’s Tariff Refund Won’t Repeat
Amazon’s operating income topped the high end of its own guidance in three of the last five quarters per TIKR, including Q2’s $27.46 billion against a $24 billion ceiling. Q3’s ceiling is $26.5 billion, and TIKR consensus sits around $26 billion.
Part of Q2’s cushion is gone. CFO Brian Olsavsky said two items cut Q2 expenses by about $1.2 billion. Roughly $600 million came from tariff refunds, which he said “represents the significant majority of refunds we expect to receive.” Another roughly $600 million came from the fair value of energy contracts, an effect he said can vary. Q3 also loses Prime Day, which moved into Q2 in most large markets.
The last EBIT miss, an 11.06% shortfall in Q3 2025, came in a quarter that carried $2.5 billion of FTC settlement charges and $1.8 billion of severance charges, per Amazon’s release.
TIKR Advanced Model Analysis
- Current Price: $248.00
- Target Price (Mid): ~$617
- Potential Total Return: ~149%
- Annualized IRR: ~24% / year
The mid case assumes revenue growth of around 13% a year and a net income margin near 16%. Growth comes from AWS capacity converting to billed revenue and from advertising, which grew 26% to $19.8 billion in Q2. The main risk is power: racks that sit idle into 2027 keep capex ahead of revenue for longer. Upside sits in Graviton, Amazon’s in-house CPU, where Jassy said revenue commitments rose nearly 3x quarter over quarter. Downside is slower conversion that delays the payoff past 2030.
Conclusion
On October 29, watch operating income against $26.5 billion and any update on powered capacity. Clearing the ceiling without the tariff refund, with the 2027 power target intact, supports the payback math. A print near the $22.5 billion low end, with no update on idle racks, makes the 2028 cash-flow turn harder to underwrite.
So what is Amazon stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
