(Bloomberg) — Amazon.com Inc. shares fell in premarket trading Monday after an analyst made a rare downgrade to his rating and raised concerns about margin performance next year that is unlikely to offset growth in its cloud computing business can.

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Wells Fargo Securities lowered its weighting on the stock from overweight to equal weight, with analyst Ken Gawrelski becoming one of the few analysts tracked by Bloomberg to not have a buy rating on the stock. He also lowered his price target to $183 from $225, one of the lowest on Wall Street.

The e-commerce and cloud computing giant fell 1.4% to $184 premarket. The stock is up 23% this year since its last close, easily outpacing the Nasdaq 100 Index’s 19% gain.

Amazon “has been a consistently positive revision story, but we believe factors are driving revisions in the near term,” Gawrelski wrote. “While the market is more prepared for fourth quarter (operating income) pressure, we caution that margin expansion may also be limited in 1H25.”

There is limited prospect of a resumption of positive estimate revisions until the company’s July 2025 outlook, he wrote, and the strength of the Amazon Web Services (AWS) cloud computing business alone is not enough.

Amazon is one of the most popular stocks on Wall Street, with about 94% of analysts rating the stock as a buy while none of them recommend selling. The analysts’ average price target of around 219 points means an upside potential of around 18% in the next 12 months.

Much of the overall optimism is tied to the AWS business, which is expected to see a long-term surge in demand driven by artificial intelligence, although there are near-term concerns about the level of the company spending on AI-related investments

Also on Monday, Bloomberg Intelligence wrote that revenue increases for AWS are “expected to accelerate 20% in 2025, about 200 basis points above consensus, our analysis shows, with greater contribution from Gen AI as demand for discretionary.” IT spending stabilized without AI.” ”

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