Amazon.com Inc (NASDAQ:AMZN) garnered renewed optimism from Wall Street on Wednesday as analysts praised the tech giant’s “agent-driven” artificial intelligence strategy and recent advancements in custom chip technology unveiled at the Amazon Web Services (AWS) re:Invent conference. This sentiment is reflected in upgraded price forecasts from multiple analysts, suggesting a strong outlook for the company.
Bank of America Securities analyst Justin Post reaffirmed a Buy rating on Amazon, raising his price target from $272 to $303. He emphasized that Amazon’s re:Invent keynote showcased substantial progress in AI as AWS moves towards an agent-driven future. CEO Matt Garman’s assertion that enterprises will soon deploy “billions” of autonomous agents, backed by the introduction of three new frontier agents designed for security, DevOps, and continuity, was notably highlighted by Post.
He further underscored Amazon’s strategic collaboration with Nvidia, especially concerning the upcoming Trainium4 chips, which will feature Nvidia interoperability and NVLink Fusion connectivity to enhance system performance. Post also introduced the concept of “AI Factories,” enabling customers to implement dedicated AWS infrastructure—including Nvidia and Trainium chips—directly within their own data centers for secure, low-latency access. Despite no major developments from OpenAI being announced, Post maintains a positive outlook on AWS, estimating revenue growth could reach 25% by 2026 as Amazon expands its capacity.
JP Morgan’s Doug Anmuth also reiterated an Overweight rating for Amazon, setting a price target of $305. He expressed increased confidence in Amazon’s position within the generative AI space following the AWS re:Invent events. Anmuth observed that Amazon is effectively closing the competitive gap through notable performance enhancements in its custom Trainium chips, the robustness of its Bedrock platform, and strong partnerships with companies like Anthropic and OpenAI. He projects AWS revenue to grow by 23% in both the fourth quarter and in 2026, suggesting that this forecast may be conservative.
One key driver for cost-effective AI deployment is the general availability of Trainium 3, which delivers 4.4 times the computing performance compared to its predecessor. Anmuth noted that improved integration with PyTorch is significantly boosting customer adoption of these custom chips. He also pointed to the anticipated Trainium 4, which will support Nvidia’s NVLink Fusion technology, as evidence of Amazon’s forward-thinking infrastructure strategy. The launch of AWS AI Factories and the new Nova 2 foundation models were also cited as important additions to Amazon’s competitive ecosystem, further solidifying Anmuth’s belief that AWS will see accelerating growth due to new AI workloads.
Wedbush analyst Scott Devitt echoed similar sentiments, arguing that Amazon’s focused expansion of its AI capabilities at re:Invent reinforced his confidence in the company’s growth trajectory. Impressed by the rapid pace of innovation, Devitt forecasts that 2026 will be a pivotal year that could drive shares toward his target of $340. He pointed out the introduction of Trainium3 chips, which boast 4.4 times better compute performance than earlier models, and the unveiling of the Nova 2 model family as crucial competitive advantages.
Devitt also highlighted advancements in “agentic AI,” noting the introduction of new frontier agents capable of autonomously managing software development, security, and DevOps tasks. He viewed the increasing backlog and higher capital expenditure guidance for 2025 as indicators of robust demand, asserting that AWS growth would have been even more pronounced were it not for existing capacity constraints. With AWS already surpassing a $130 billion run rate and doubling its capacity since 2022, he anticipates a 22% year-over-year growth in the next quarter as demand for AI solutions continues to rise.
AMZN Price Action: Amazon.com shares were down 0.84% at $232.45 at the time of publication on Wednesday, according to Benzinga Pro data. The positive reception from analysts underscores the growing confidence in Amazon’s evolving AI initiatives and their potential to reshape the company’s future.
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