Roth Capital Markets analyst Rohit Kulkarni maintained a “Buy” rating and US$250.00 12-month target on Amazon (Amazon Stock Quote, Chart, News, Analysts, Financials NASDAQ:AMZN) in an Oct. 16 earnings preview, saying the company remains a top pick among mega-cap technology names heading into year-end.
Kulkarni expects Amazon to report third-quarter results on Oct. 30 after market close, and said he is raising AWS growth assumptions following a series of AI Cloud product announcements that suggest growing customer traction.
“We are now modelling accelerating growth in AWS in the second half of 2025 versus the first half,” he said. “At US$205 per share, AMZN trades at roughly 25× 2026E P/E, which we view as a trough valuation for a potentially significant AI winner over the longer term.”
He now forecasts AWS revenue growth of 18.6% and 19.5% year-over-year in the second half of 2025, up from 17.4% in the first half, and expects Amazon’s stake in Anthropic (estimated at 12–14%) to contribute positively to third-quarter EPS through valuation revisions.
Among current debates, Kulkarni said investors should watch for AWS’s Trainium 3 preview and Project Rainier updates by year-end 2025. Trainium 3, built on a 3-nanometre process and expected to deliver twice the performance of its predecessor, could be previewed by re:Invent 2025, while Project Rainier’s U.S. data-center rollout should begin providing capacity boosts to AWS in the fourth quarter.
He cautioned that retail margins may face pressure from tariffs and Project Kuiper satellite launches, which have accelerated to six missions and 153 satellites in orbit so far.
“We think pricing impacts have not fully flowed through and Amazon has yet to adopt material cost offsets,” he said.
Kulkarni also addressed Amazon’s one-month pause of Google ad spending in July, calling it an “experiment in incremental attribution and pricing leverage” tied to updates in Amazon’s in-house search assistant, Rufus, and its integration of sponsored listings.
“Demand for both AI and non-AI cloud services on AWS continues to rise as generative-AI applications move beyond experimentation and enterprises modernize infrastructure,” he said. “More capacity from Project Rainier could provide a step-function boost to AWS growth in the second half of 2025.”
Kulkarni said that Amazon should do US$165.1-million in Adjusted EBITDA on revenue of US$707.9-million in fiscal 2025, improving to US$198.4-million on revenue of US$782.1-million in fiscal 2026, compared with prior estimates of US$707.0-million and US$777.7-million, respectively.
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