Jim Cramer Backs Amazon Despite 7.4% YTD Slide and $200B CapEx Plan
Amazon shares have fallen 1.4% over the past year and 7.4% year-to-date as the company outlines a $200 billion capital spending plan that could weigh on free cash flow. Moody’s revised its outlook to stable and Bernstein cut its price target to $265 while maintaining an Outperform rating.
1. Share Performance and CapEx Plan
Amazon’s share price is down 1.4% over the past year and 7.4% year-to-date as management commits to a $200 billion capital expenditure program, a level that Moody’s warns could pressure free cash flow over the medium term.
2. Credit Outlook Revision
Moody’s shifted its outlook on Amazon to stable from positive while reaffirming the company’s Senior A1 credit rating, signaling confidence in the balance sheet despite heightened spending.
3. Price Target Adjustment
Bernstein reduced its Amazon share price target to $265 from $300 but upheld an Outperform rating, citing strong cloud computing growth that still falls short of justifying the expanded capex trajectory.
4. Cramer’s Bullish Stance
Jim Cramer took a contrarian view, arguing that Amazon is outperforming expectations and that the market’s “wounded tiger” narrative underestimates the company’s operational resilience and growth catalysts.