Jefferies' Assessment of Drivers for Amazon (AMZN) Target Price Upgrade and Valuation Rationality (Data-Driven Perspective)

• Target Price: Raised from $275 to $300, an increase of approximately 9.1%, implying an upside of about 32.4% relative to the current price ($300/$226.50−1) [0].
• Analyst Background and Comparable Targets: Public channels show that multiple institutions have recently given target prices of $300 or higher, consistent with Jefferies’ upgrade direction (e.g., Guggenheim, TD Cowen, etc., gave target prices in the range of $300–$360) [1][2][3].

1. AWS Capacity Expansion and AI-Related Demand

• Web search summaries indicate that AWS is expected to double its capacity by 2027 and is regarded as a key catalyst [1].
• Combined with the company overview, AWS is the main profit contributor, and its expansion and AI infrastructure demand strengthen the growth and profit improvement path [0].

2. Advertising Business and Prime Video

• Search and industry comments suggest that the advertising business (including Prime Video ad load) will maintain acceleration during seasons and around 2026 [1].
• According to the company overview, advertising services account for nearly 10% of revenue and are a high-margin business [0].

3. Profitability and Performance Momentum

• Q3 2025: EPS $1.95 vs. expected $1.57, exceeding expectations by +24.2%; revenue $180.17B vs. expected $177.91B, exceeding expectations by +1.3% [0].
• TTM net margin is approximately 11.06%, operating margin approximately 11.02%, and ROE approximately 23.62%, which have improved compared to the past [0].

4. Analyst Consensus and Ratings

• Rating: Buy ratio is approximately 89.4% (84/94) [0].
• Consensus target price: Approximately $300, consistent with Jefferies’ upgrade [0].

• Current Price: $226.50 (real-time quote) [0].
• TTM P/E: Approximately 31.6x, higher than the traditional retail/e-commerce range of 20–25x, showing a premium [0].
• Target Price $300 Implied TTM P/E: Approximately 42x ($300/($226.50/31.6)), significantly higher than the current TTM P/E, requiring sustained profit growth to support it.
• DCF Scenarios (Broker API):
  • Conservative: ~$180.98 (-20.1% vs. current)
  • Base: ~$207.43 (-8.4% vs. current)
  • Optimistic: ~$275.91 (+21.8% vs. current)
  Probability-Weighted Fair Value: Approximately $221.44 (-2.2% vs. current) [0].
• Note: Jefferies’ target price of $300 is slightly above the optimistic DCF, but if AWS and advertising continue to deliver higher growth/margins after 2026, the valuation can move closer to $300.

• Trend: Recent sideways/no clear trend, support ~$228.75, resistance ~$232.89, no clear buy/sell signal formed [0].
• Market Environment (October–December 2025):
  • S&P 500: +2.71%; Nasdaq Composite: +3.16%; Dow Jones: +3.66% [0].
  Indices rose moderately, macro environment neutral to positive, but no extraordinary momentum provided.

1. Profit and Revenue: Need sustained beat-and-raise growth to support the high P/E corresponding to the target price.
2. AWS and Advertising: Capacity expansion and AI demand realization, as well as ad load and monetization efficiency improvement, are the main sources of upside.
3. Profit Margins: Further improve profit margins (rising AWS and advertising share) to strengthen EPS growth.
4. Macro and Regulation: Maintain stable consumer demand and controllable regulatory/interest rate environment.

• Execution Risk: AWS expansion and AI project launch pace.
• Competition and Macro: Cloud and advertising competition, consumer demand and interest rate fluctuations.
• Regulation and Antitrust: Related developments may put pressure on valuation.

• Short-Term: Jefferies’ target price upgrade to $300 aligns with multi-institution consensus, reflecting structural optimism on AWS, AI and advertising businesses. The current TTM P/E of approximately 31.6x already has a premium; the target implies a higher valuation multiple, requiring sustained profit and growth.
• Mid-Term: If AWS and advertising businesses accelerate as expected and profit margins continue to improve, the current valuation premium becomes more rational; but macro and regulatory support are needed.
• Technical aspects show no clear trend; investors should dynamically assess the probability of target achievement based on performance verification and catalyst timing.

[0] Jinling API Data (real-time quotes, company overview, technical analysis, DCF, financial analysis, market indices).
[1] 247wallst (related report on AWS possibly doubling capacity by 2027) [link].
[2] Investing.com (summary of AMZN target prices and analyst views, including multiple institutions’ $300–$360 target range) [link].
[3] MarketBeat (analyst ratings and target price list) [link].

(The above analysis is completely based on data returned by called tools and retrieved summaries, avoiding unfounded inferences.)