Amazon Stock: Truist Hikes Price Target in Anticipation of Strong Q2 Readout

With the year’s second quarter now done and dusted, it’s time for Wall Street to start assessing how it played out.

Of course, it’s the market giants that will be drawing most of the attention, and according to Truist analyst Youssef Squali, at least one of them is primed for a strong readout. “We expect Amazon (NASDAQ:AMZN) to report stronger than expected 2Q25 results driven by a resilient NA consumer virtually unaffected by the macro or tariffs so far, and by favorable FX on a weakening US$,” Squali said.

Based on the positive trends seen in the firm’s Truist Card Data, along with the advantage of a weakening US dollar, Squali has been adjusting his Q2 estimates. The analyst now anticipates total revenues of $164.2 billion, representing an 11% year-over-year increase and above consensus at $162.0 billion (a 9% rise). Squali’s figure also exceeds the upper end of the ecommerce giant’s guided range of $159.0 billion to $164.0 billion. Within the total haul, the analyst now expects North American revenues of $99.6 billion, above the Street’s forecast of $97.2 billion. From March to April, growth trends apparently picked up pace, followed by a mild slowdown in May. In June, the trends have started to re-accelerate once more.

Squali has also raised his international revenue estimate to $33.85 billion (up 7% YoY), compared to his previous estimate of $33.5 billion, slightly below consensus at $33.9 billion. This uptick is due to “foreign exchange tailwinds,” a notable development since management had previously forecasted a 10 basis point FX headwind for Q2. “Weakness of the USD vs. the Euro, the JPY and the BP in 2Q25 has caused FX to be less of a headwind and could lead to FX being a tailwind, by our estimate, and should also benefit the 3Q25 guide,” Squali went on to add.

As for AWS, supported by increased contributions from generative AI, Squali expects the segment will maintain solid high-teens growth. In Q1, AWS revenue grew 17% YoY, slightly down from 19% in the previous three quarters, and Squali thinks this high-teens growth will continue with revenue hitting $30.7 billion in the quarter, the growth “underpinned by healthy trends in both core cloud services and Gen-AI workloads.”

According to management, generative AI is already a multi-billion-dollar annual business growing triple digits YoY, with further acceleration expected in the second half of the year. Importantly, says Squali, AWS is likely to maintain strong operating margins, having delivered $11.5 billion in operating income at a 39.5% margin in Q1 – a record high that improved from 36.9% in 4Q24 and 37.6% in 1Q24. “While AWS margins are likely to fluctuate Q/Q as it invests behind the opportunity in Gen-AI, we believe the ongoing cost discipline coupled with strong underlying demand for its core cloud computing and Gen-AI workloads should enable it to sustain high margins in the mid-to-high 30%s moving forward,” the analyst further said.

With a strong Q2 about to play out, Squali maintained a Buy rating on AMZN shares and raised his price target from $226 to $250, implying the stock will climb 14% higher in the months ahead. (To watch Squali’s track record, click here)

Barring one analyst who remains on the sidelines here, all 47 other recent AMZN reviews are positive, making the consensus view a Strong Buy. Going by the $244.53 average target, a year from now, shares will be changing hands for an 11% premium. (See Amazon stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.