Citizens Sticks to 'Market Outperform' on Amazon Amid AI Growth

Citizens, an investment firm, has reaffirmed its Market Outperform rating for Amazon (NASDAQ:AMZN) stock. The analysts cited growth in AI model revenue as a key factor behind their optimism. According to a Wall Street Journal report, OpenAI's revenue rose 18% quarter-over-quarter to $6.7 billion, while Anthropic more than doubled its revenue to $11.6 billion.

Citizens analyst Andrew Boone stated that the growth of frontier models is positive for cloud providers AWS and GCP as it suggests training investments are seeing returns through inference.

The firm also highlighted Amazon's attractive valuation relative to its growth prospects, with a PEG ratio of 0.23. As such, Citizens maintains a Market Outperform rating on AMZN stock with a price target of $315.00.