Original Coverage & Source Attribution: 247wallst.com
AWS just posted its fastest growth in 18 quarters, OpenAI and Anthropic locked in gigawatts of custom chip capacity, and yet Amazon shares sit 15% below their 52-week high. Something in that gap deserves a closer look.
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Our 24/7 Wall St. price target for Amazon (NASDAQ:AMZN | AMZN Price Prediction) is $329.19 over the next 12 months. That is 30.49% above the model’s reference price of $252.29. The model rates the stock a buy with pretty high confidence.
| Metric | Value |
|---|---|
| Current Price | $252.29 |
| Price Target from 24/7 Wall St. | $329.19 |
| Upside/Downside | 30.49% |
| Recommendation | BUY |
| Confidence Level | 70% |
Investors view Amazon mostly as a retailer with a cloud business. AWS backlog hit $496 billion, and AI and chips each passed $25 billion in annualized revenue. The stock trades at about 20x consensus 2026 EPS of $12.882.
AWS Posts Its Fastest Growth in 18 Quarters While Shares Stall
Over the past year the stock is up 14.67%, and it has gained 9.74% year to date. It fell 2.01% over the past month but rose 2.69% over the past week. Shares sit around 15% under the 52-week high of $287.20 and about 29% above the low.
Second-quarter revenue rose 19.62% to $200.61 billion, ahead of the $196.43 billion estimate. GAAP EPS of $5.75 included a $53.40 billion gain on the Anthropic stake.
On a comparable basis, EPS came in at $1.88, ahead of the $1.83 estimate. Operating income grew 43.24%. Third-quarter guidance calls for operating income of $22.5 billion to $26.5 billion, versus $17.4 billion a year earlier.
Why Bulls See $378 and Beyond
Custom silicon is where the market likely underestimates Amazon. OpenAI committed to around 2 GW of Trainium capacity starting in 2027, and Anthropic will secure up to 5 GW.
CEO Andy Jassy said there is “a real chance” Amazon will sell Trainium chips outside AWS and that AWS could become “a trillion dollar annual revenue business for us in time.” Advertising grew 26%, and the Rufus shopping assistant added nearly $12 billion in annualized sales.
Of the analysts covering the stock, 15 rate it a strong buy, 43 a buy and only 2 a hold. The bull case points to $378.81.
Free Cash Flow Is the Risk Worth Watching
Free cash flow fell to -$7.6 billion over the trailing 12 months. Capex of about $200 billion is planned for 2026, and long-term debt rose to $119.1 billion. The Anthropic gains will not repeat, and 2027 consensus EPS of $10.5149 works out to around 24x earnings.
Management says servers break even in “a little less than three years” and most AI capacity is sold on five-year contracts. A bear-case target of $283.35 is still above current price.
How Amazon Compares to Microsoft and Alphabet
The closest cloud rival is Microsoft (NASDAQ:MSFT). Azure grew 43%, and Microsoft’s operating margin of 46.8% shows how profitable software-weighted businesses can be.
Heavy AI spending is underway at Alphabet (NASDAQ:GOOGL). Google Cloud grew 82%, yet Alphabet’s free cash flow fell to -$5.86 billion and it suspended buybacks. Every hyperscaler is paying for AI with cash flow. Amazon earns a premium multiple because retail margins are expanding.
| Company | Trailing P/E | Operating Margin | Cloud Growth |
|---|---|---|---|
| Amazon | 36 | 11.16% | 37% |
| Microsoft | 29 | 46.8% | 43% |
| Alphabet | 15 | 32.1% | 82% |
Amazon Price Prediction 2026-2030
The 24/7 Wall St. price target of $329.19 has a buy rating at 70% confidence. Trainium demand locked in by contract is the deciding factor. The bull case strengthens if AWS speeds up and free cash flow recovers in 2027. Even the bear case leaves room for upside.
Here is where our model projects Amazon could trade, assuming current growth trends continue.
| Year | Price Target from 24/7 Wall St. |
|---|---|
| 2026 | $271.30 |
| 2027 | $322.66 |
| 2028 | $385.41 |
| 2029 | $464.01 |
| 2030 | $501.52 |
The projections rest on Amazon continuing to execute on its AI strategy. Selling Trainium to outside buyers could drive results higher, while a long period of negative free cash flow could pull them lower. The broader question is who else gets paid as the data-center expansion continues, and we rounded up seven suppliers outside the chipmakers in a free report on the AI boom.
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