10:34 AM EDT, 08/01/2025 (MT Newswires) -- Amazon's ( AMZN ) outlook has some "conservatism embedded" due to the company's outperforming the high end of its revenue and operating income guidance for several consecutive quarters, Wedbush said in a Friday note.

The company's Q3 guidance was "mixed," with revenue growth expectations of 10% to 13% greater than the Street's 9%, but anticipated operating income of $18 billion below consensus estimates of $19.4 billion, Wedbush analysts said.

Amazon Web Services reported growth of 17.5% in Q2, surpassing estimates by around 50 basis points but shares were down about 7% after the market close, "primarily reflecting disappointing results versus investor expectations," the analysts said.

The "rising perception of AWS as a laggard in the AI space" could reinforce concerns on the intermediate-term trajectory of its growth rate and margin and remain an overhang on shares, the analysts said. However, they said that they do not believe the company's long-term opportunity is impaired.

The analysts said they were encouraged by the implied level of demand based on the pace of backlog growth and a higher capital expenditure guidance for the year. They increased their 2025 revenue estimates and lowered their H2 operating income expectations.

Wedbush reiterated the company's stock rating at outperform and price target at $250.

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