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Amazon Shares Drop 4% Following Raymond James Downgrade Over Tariffs and AI Spending

Raymond James cuts Amazon’s rating and price target, citing tariff pressures and concerns over AI investment returns, as Bank of America maintains a bullish outlook.

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Overview

  • Amazon stock fell approximately 4% on April 21, 2025, after Raymond James downgraded its rating from Strong Buy to Overperform.
  • Raymond James reduced Amazon’s price target to $195 from $275, citing cost pressures from U.S.-China tariffs and significant AI-related capital expenditures.
  • Analysts trimmed Amazon’s EBIT forecasts for 2025 and 2026, estimating $73 billion and $86 billion, respectively, down from previous projections.
  • President Trump’s reciprocal tariffs, including a 145% duty on Chinese imports, are impacting Amazon, with 30% of its gross merchandise value and 14% of its ad revenue tied to China.
  • Despite tariff concerns, Bank of America reaffirmed its Buy rating for Amazon, maintaining a $225 price target and emphasizing long-term growth potential.