Amazon Cloud Earnings Get Boost from Rising AI Prices

Amazon's cloud computing arm, AWS, is expected to see a boost in earnings due to rising prices for AI-grade server capacity. This has been pointed out by Wall Street analysts, who believe this will lead to increased revenue growth.

Goldman Sachs and Wells Fargo have both expressed optimism about Amazon's future prospects, with Goldman setting a price target of $360 and Wells Fargo reaffirming its Overweight rating with a target of $338. The improved pricing power is expected to feed through to the financials gradually, mainly in early 2027.

A separate concern has been raised by analysts about the potential impact on Amazon's advertising business due to autonomous AI shopping assistants. However, Rosenblatt Securities' Scott Devitt counters that Amazon retains its value in actual transactions and logistics, and benefits from rising purchase volumes even if search habits shift.