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Amazon.com Seen Maintaining AI Focus Despite Higher Capex, Wedbush Says

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Amazon.com (AMZN) continues to offer a favorable long-term artificial intelligence opportunity despite investor focus on capital spending and free cash flow, Wedbush said in a Thursday note.

The firm said it will focus on Amazon's capital spending outlook, Amazon Web Services' backlog, artificial intelligence revenue and potential external Trainium chip sales when the company reports Q2 results.

Wedbush expects continued investment in Trainium capacity and the Amazon Leo satellite network while monitoring management's commentary on demand and capacity. The firm also expects North America retail margins to continue improving through automation, faster delivery hubs and AI-driven personalization.

Advertising remains an important margin contributor through Prime Video's advertising tier and the company's demand-side platform, Wedbush analysts noted.

Amazon will report Q2 results after markets close on July 30.

Shares of the company were 5% lower in Thursday trading.

Wedbush maintained its outperform rating on Amazon and its $293 price target.

Price: $232.93, Change: $-11.92, Percent Change: -4.87%

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