Before the first-quarter earnings report, J.P. Morgan analysts expressed optimism about Amazon (AMZN). According to analyst Doug Anmuth, Amazon remains the internet sector’s best bet, even though the current macro environment is affecting spending. 

While first-quarter e-commerce trends are still moderate, the growth rate has improved from the previous quarter, but is expected to slow down throughout the period.Despite the current situation, Anmuth believes that Amazon and other e-commerce retailers will continue to gain market share by tapping into previously unexplored areas, such as grocery, apparel, accessories, and furniture. He is also confident that Amazon will be able to improve its operating margins by 2023 by making strides in retail and cost control.

Amazon’s shares rose by 3.3% to $107.22 on Friday, despite Anmuth maintaining his Overweight rating and $135 price target for the company. The upcoming first-quarter earnings report on April 27, after the market closes, is expected to show adjusted earnings of 23 cents a share on sales of $124.6 billion according to analysts surveyed by FactSet. Investors will be closely monitoring Amazon Web Services’ performance. 

In his annual shareholder letter published on April 13, CEO Andy Jassy stated that the cloud computing unit is facing short-term headwinds as companies are more cautious in spending due to challenging macroeconomic conditions. AWS is the main contributor to Amazon’s annual operating profit. Piper Sandler’s analyst, Thomas Champion, noted that AWS has a 50% market share and will perform even better in a challenging spending environment. He maintained an Overweight rating and $123 price target on the stock.

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