Wells Fargo Sticks to Overweight on Amazon as AWS Pricing Power Endures
Wells Fargo has reaffirmed its Overweight rating on Amazon stock, citing the company's continued pricing power in the cloud computing market. Specifically, Amazon Web Services (AWS) announced a 15% increase to GPU reserve pricing starting October 7, 2026, following a 20% increase effective July 1, 2026. This marks the fourth consecutive quarterly price hike across GPU classes.
AWS's sustained demand for AI compute is driving these price increases, which are expected to support the company's revenue acceleration through early 2027. Additionally, AWS's ability to pass on supply chain inflation to customers will likely impact 2027 capacity additions.
Wells Fargo notes that the delayed monetization of these price changes due to the contracted nature of current capacity may affect reported earnings in the short term. However, the firm remains optimistic about Amazon's prospects and has set a $338.00 price target for the stock.