JPMorgan Lifts PT on Amazon.com (AMZN) Stock, Keeps Overweight

Amazon.com, Inc. (NASDAQ:AMZN) is one of the Most Promising AI Stocks to Buy Now. JPMorgan increased the price target on the company’s stock to $255 from $240, while keeping an “Overweight” rating. Notably, the firm updated estimates and price targets in the internet space. While the estimate increases exhibit better channel checks and favorable currency moves, increased share multiples demonstrate the reduced recession risk. Amazon.com, Inc. (NASDAQ:AMZN) is considering another multibillion-dollar investment in AI firm Anthropic, which can help strengthen the strategic partnership, as highlighted by Reuters while quoting the Financial Times.

Notably, it invested $4 billion into Anthropic in November last year to capitalize on the Gen AI technology, added Reuters.  This brought Amazon.com, Inc. (NASDAQ:AMZN)’s total investment in Anthropic to $8 billion.

Amazon.com, Inc. (NASDAQ:AMZN) remains focused on bolstering its reputation in AI development, after competitors like OpenAI and Google took an early lead, mainly with the consumer-focused models, noted Reuters. Notably, the integration of AI technologies in AWS can enhance the cloud offerings, ramping up growth in this high-margin segment. Furthermore, AWS’s focus on developing AI-powered tools and services remains in line with the growing enterprise demand for advanced cloud capabilities. Overall, the integration of AI technologies in AWS can enhance Amazon.com, Inc. (NASDAQ:AMZN)’s cloud offerings.

Alphyn Capital Management, an investment management firm, released its Q2 2025 investor letter. Here is what the fund said:

“Amazon.com, Inc.’s (NASDAQ:AMZN) structural edge keeps widening. Its high-return, capital-light businesses compound without depending on the retail cycle. AWS is growing at mid-teens rates with nearly 40% segment margins and now contributes more than half of the group’s operating income. Advertising, an asset-light adjunct to the marketplace, is expanding even faster at 19% and directly impacts the bottom line. Meanwhile, the core retail business continues to benefit from the regionalized fulfilment network built over the last two years. North American retail margins would have reached roughly 7% absent tariff-related charges.

Amazon generated approximately $25 billion of trailing free cash flow, more than enough to cover stepped-up investments in artificial intelligence and robotics, while also funding Project Kuiper, whose first production satellites launched in April and can extend AWS into connectivity white spots around the world. I view Amazon as a self-funded, multi-legged compounding machine that trades at what appears to be a mid-teen multiple of normalized free cash flow.”

While we acknowledge the potential of AMZN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.