Amazon Stock Predicted to Hit $347 by End of Next Year

Amazon's stock price has been underestimating the company's earnings power, according to a recent analysis by 24/7 Wall St. The analysis suggests that Amazon's AWS is accelerating at its fastest pace in nearly five years, with AI demand outrunning supply.

The model predicts that Amazon's stock will reach $347.37 within the next year, exceeding the current Wall Street consensus target of $328.17. This prediction is based on the company's ability to monetize AI and AWS operating leverage, which are expected to outpace near-term free cash flow headwinds tied to Amazon's capital expenditure.

The analysis also notes that Amazon's AWS has already hit a 39.4% operating margin, approaching Microsoft's 45.1%, while growing faster. This, combined with the company's aggressive power capacity lockdown for its data centers and multi-gigawatt commitments from OpenAI and Anthropic, suggests that Amazon is well-positioned for future growth.

However, there are risks associated with this prediction, including trailing 12-month free cash flow at negative $7.6 billion and planned 2026 capital expenditure of $200 billion. Management has noted that AWS servers break even in less than three years and generate significant free cash flow across a five to six year useful life.