Amazon (NASDAQ: AMZN) stock comes under pressure after the tech giant announced it would lay off 16,000 employees. Human Resources Chief Beth Galetti termed the decision as efforts to “reduce layers, increase ownership, and remove bureaucracy” in the company. The e-commerce giant is trimming its workforce and also announced it would close the remaining Fresh grocery stores and Go markets. This comes after the firm is looking to offset its AI-related spending as investors are closely watching the costs involved. Amid all the developments, Bank of America revised its forecast for Amazon stock and lowered the price target.
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Amazon Stock: Bank of America Goes Bearish on AMZN
Bank of America previously forecasted that Amazon stock could reach a high of $303. The leading bank had also given a ‘buy’ rating, citing that AWS is dominating the industry. However, in a new revised setting, the bank has lowered the AMZN price target to $286, citing layoffs, closures of grocery stores, and its spending on AI infrastructure. That’s a reduction of $17 from its previous forecast, where it was estimated to go above $300.
The other downside factors Bank of America associated with Amazon stock:
- High competition from other offline and local retailers.
- AWS clients are optimizing their costs, which is impacting the revenues and margins of Amazon.
- Regulatory pressure on the third-party marketplace.
- The economic uncertainty, especially on goods due to tariffs, is increasing volatility in AMZN.
However, Amazon stock is currently trading at the $243 level on Thursday, and Bank of America estimates it could rise by another $43. That’s an uptick and return on investment (ROI) of approximately 18%. Therefore, an investment of $1,000 could turn into $1,180 if the price prediction turns out to be accurate. It’s still a positive trend despite AMZN receiving a lower price target.
