Amazon.com, Inc. (NASDAQ:AMZN)’s first quarter results shocked the markets despite stronger than expected revenues. Shares of the online retailer plunged more than 9% on Friday as investors expressed concerns over its lower than expressed earnings. Subsequently, many analysts downgraded the stock. But Cantor Fitzgerald analysts Youssef Squali and Naved Khan have maintained their Buy rating on Amazon, and raised price target from $415 to $425.

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Amazon’s revenue growth re-accelerates, thanks to EGM

Amazon.com, Inc. (NASDAQ:AMZN)’s North America business showed sustained momentum while its international sales accelerated. It indicates that the company’s business has started improving in key markets outside the U.S.Though unit growth decelerated during the quarter, it was more than offset by solid growth in Amazon Web Services and increasing average revenue per active account. Analysts said that the Seattle-based company’s focus on content and growth investments is likely to hamper profitability and margins in the near term. But these investments are highly likely to convert into outsized growth and market share gains.

Amazon.com, Inc. (NASDAQ:AMZN)’s first quarter revenues grew 23% YoY to $19.74 billion, beating the consensus estimate of $19.41 billion. Though GAAP earnings of 23 cents was above the consensus estimate of 22 cents, it included 13 cents in the one-time benefit. EPS and operating margin were lower due to higher operating expenses. Amazon’s North America sales soared 26% during the quarter, thanks to solid demand for electronics and general merchandise. EGM also helped boost the company’s international sales by 18% YoY, up from 15% in the fourth quarter.

Blame AWS price cuts and ongoing investments for Amazon’s mixed guidance

The online retail giant said its overall revenues grew 23% in Q1, up from 20% in Q4, 2013. However, the paid unit growth slowed from 25% in Q4 to 23%. Amazon.com, Inc. (NASDAQ:AMZN) forecasts its current quarter revenues in the range of $18.1-$19.8 billion, reflecting a 20.5% growth at mid-point. That’s in line with the Wall Street consensus of $19.1 billion. However, the Jeff Bezos-led company expects operating losses of $55-$455 million, while analysts were expecting a profit of $183 million.

Cantor Fitzgerald says the mixed second quarter guidance reflects heavy price cuts to its cloud services and ongoing investments. Amazon.com, Inc. (NASDAQ:AMZN) shares rose 1.37% to $300.65 at 1:03 PM EDT on Tuesday.