Citi Sticks With Amazon as Top Pick Despite FTC Ad Suit

Key Moments

Citi reiterates Amazon.com, Inc. (NASDAQ:AMZN) as its top stock pick with a Buy rating and a $350 price target despite an FTC lawsuit over advertising practices.
Amazon reports that from 2019 to 2024 inflation-adjusted Sponsored Products cost-per-clicks stayed flat, while conversion rates increased more than 24% during 2021-2025.
Citi bases its $350 target on a 2027 price-to-earnings multiple of about 31.5 times and an implied 2027 enterprise value-to-EBITDA of roughly 11 times.

Citi Backs Amazon Amid Regulatory Pressure

Investing.com — Citi reaffirmed Amazon.com, Inc. (NASDAQ:AMZN) as its preferred equity idea even as the company faces a Federal Trade Commission lawsuit focused on its advertising business.

The firm stated it would treat any share price pullback as an opportunity to accumulate the stock, pointing to rising demand for artificial intelligence, continued gains in retail market share, and improving profitability.

Rating, Target, and Valuation Framework

Citi maintained its Buy recommendation on Amazon and kept its price objective at $350 per share.

According to the bank, Amazon’s stock is currently trading at roughly 23.5 times its 2027 earnings per share forecast of $11.06.

Metric	Figure	Context
Rating	Buy	Citi recommendation on Amazon.com, Inc. (NASDAQ:AMZN)
Price Target	$350	Citi’s target price for the shares
2027 EPS Estimate	$11.06	Citi’s projected earnings per share for 2027
Current P/E on 2027 EPS	23.5x (approx.)	Implied multiple based on Citi’s 2027 EPS estimate
Target 2027 P/E Multiple	31.5x (approx.)	Valuation multiple underpinning the $350 target
Implied 2027 EV/EBITDA	11x (approx.)	Described as near the low end of Amazon’s past ten-year range

Citi explained that the $350 target is derived from applying a roughly 31.5 times 2027 price-to-earnings multiple, which also corresponds to an implied 2027 enterprise value-to-EBITDA ratio of about 11 times. The firm characterized that EV-EBITDA level as positioning Amazon toward the bottom of its trading band over the previous decade.

Amazon’s Response to FTC Allegations

Analysts at the bank pointed out that Amazon has countered the FTC’s claims by sharing internal performance metrics from its advertising platform.

The company indicated that, on an inflation-adjusted basis, Sponsored Products cost-per-clicks were unchanged between 2019 and 2024. Over the 2021-2025 period, conversion rates reportedly increased by more than 24%.

Amazon also asserted that its advertising technology investments generated substantial savings and performance improvements for marketers. The company said its ad platform delivered $8 billion in savings to advertisers, while producing 58% higher sales, 46% stronger return on ad spend, and 58% greater exposure versus other pricing approaches.

Strategic Moves in Cloud, AI, and Infrastructure

Beyond the regulatory backdrop, Citi’s note highlighted several recent corporate developments at Amazon.

Amazon Web Services (AWS) has launched a strategic partnership with Cognition to roll out its AI engineer, Devin. In addition, AWS entered into a supply arrangement with Generac valued at up to $8 billion for backup power generators.

The cloud division also disclosed that it is unable to reestablish access to one of its facilities in Bahrain due to damage linked to wartime conditions.

Market Reaction and Growth Drivers

Amazon shares moved lower after investors learned of the FTC’s lawsuit. Despite this weakness, Citi emphasized its constructive stance on the stock, underpinned by multiple growth catalysts.

The firm expects AWS revenue growth to reaccelerate in the second half of 2026, supported by AI-related demand. Citi also underscored Amazon’s recently revealed collaboration with NVIDIA to roll out more than 2 million GPUs across 2027-2028.

On the retail side, Citi argued that Amazon is continuing to capture a larger share of consumer spending. The bank cited the influence of Agentic Commerce and Alexa Shopping, which it said are contributing to higher conversion rates within the retail business.