Amazon Price Target Soars to $365 as JPMorgan Sees AI Growth Payoff

Amazon's recent earnings report has sent shockwaves through Wall Street, with JPMorgan boosting its price target for Amazon stock to $365 from $330. This represents a nearly 34.4% upside from current prices.

The increase is largely due to the tech giant's impressive AI growth, which saw cloud sales rise sharply and operating profit expand. The company's AWS backlog also climbed to a record level, offering investors a high degree of visibility into future cloud sales.

However, Amazon's cash flow did deteriorate as infrastructure spending soared, leading some analysts to express caution about the company's long-term prospects. JPMorgan's Doug Anmuth noted that while the company's AI investment cycle is showing signs of durability, it remains unclear whether AWS can convert booming demand into sufficient long-term profit to outweigh Amazon's severe near-term cash burn.

Despite these concerns, JPMorgan's overall view on Amazon is bullish, with the bank retaining an Overweight rating and keeping the stock in its Best Idea list. The company's thesis centered on Amazon's breathtaking top-line growth, which saw its overall sales rise 20% and cloud behemoth AWS grow 37%, its fastest rate in 18 quarters.

Other analysts were also upbeat on Amazon's prospects, with Goldman Sachs boosting its price target to $375 and Morgan Stanley raising its target to $335. However, Bank of America was more cautious, looking for evidence that the company can effectively translate its tremendous AI spending into strong, lasting cash flow.