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SUMMARY
Parkev Tatevosian, CFA and university professor, provides a detailed scenario analysis for Amazon's stock price by the end of 2027, projecting a target range of $360 to $400 per share. The analysis considers earnings estimates, valuation multiples, and potential catalysts affecting Amazon's future performance.
MAIN POINTS
- Amazon has outperformed the S&P 500 in 2026 and is projected to improve earnings per share to $13.35 in 2028.
- Amazon's current forward price-to-earnings ratio is 25.84, lower than Walmart and Costco, and scenario analysis for 2027 price targets is introduced.
- Price targets range from $280 to $400 per share depending on forward PE multiples, with the most likely scenario between $360 and $400.
- A key upside catalyst would be Amazon signaling a reduction in capital expenditures due to sufficient data center capacity and improved efficiencies.
- A downside risk is identified as a potential deceleration in AWS growth, which could keep the stock price in the $200s.
- The final price target is set at $380 midpoint, with additional resources and live coverage offered to channel members.
DETAILED ANALYSIS
Amazon's stock performance in 2026 has already surpassed the broader market, with a 16% gain year-to-date, positioning it as a top investment choice according to Parkev Tatevosian. Using Wall Street analyst forecasts, Amazon's earnings per share for fiscal year 2028 are estimated at $13.35, up from $10.38 projected for 2027. The forward price-to-earnings (PE) ratio currently stands at 25.84, notably lower than traditional retailers like Walmart and Costco, reflecting a shift in market sentiment from the earlier 'retail apocalypse' era when Amazon was seen as a dominant disruptor.
Tatevosian outlines four scenarios for Amazon's stock price by December 31, 2027. If the forward PE remains unchanged, the stock could reach $345 per share. Should the multiple rise to 27, the price target increases to $360, and at a PE of 30, it could hit $400. Conversely, a decline in the forward PE to 21 would result in a more modest price of $280. The base case expects the multiple to settle between 27 and 30, yielding a projected upside of 42% from the current price of $267.
A significant upside catalyst would be Amazon announcing a slowdown in capital expenditures for data center expansion, signaling that existing infrastructure is sufficient to meet demand efficiently. Such a move, if driven by operational improvements rather than weakening demand, could push the stock as high as $500. On the downside, a sustained deceleration in Amazon Web Services (AWS) growth, which has recently been accelerating at nearly 40% year-over-year, would pose a risk and could keep the share price in the $200s.
Tatevosian concludes with a midpoint price target of $380 and offers further analysis and live earnings coverage to channel members.
LINKS
- YouTube channel membership for exclusive perks and resources.
- Special offer for The Motley Fool Stock Advisor.
- Parkev Tatevosian's book on evaluating publicly traded companies.
- Discounted access to Fiscal.ai for investment research.
- Webull sign-up link with bonus shares.
- Subscription to Parkev Tatevosian's free monthly newsletter on Substack.