Amazon stock gains as Mizuho reiterates Outperform rating on OpenAI deal

Investing.com - Amazon.com (NASDAQ:AMZN) shares rose 4-5% in early trading after Mizuho reiterated an Outperform rating and $300 price target on the stock, following the company’s $38 billion cloud computing deal with OpenAI. This significant deal comes as Amazon positions itself to capitalize on the rapidly growing AI infrastructure market.

The seven-year agreement will provide OpenAI with cloud compute resources, including access to hundreds of thousands of Nvidia GB200s and GB300s GPUs. According to the announcement, OpenAI will immediately begin utilizing AWS compute, with all capacity targeted for deployment before the end of 2026. Notably, Nvidia (NASDAQ:NVDA), whose GPUs are central to this deal, has seen its stock surge 76.87% over the past six months and is currently trading near its 52-week high of $212.19, according to InvestingPro data.

Mizuho views the OpenAI deal as validating the long-term opportunity for AWS to more fully participate in generative AI infrastructure demand, potentially driving estimate upside and multiple expansion for Amazon shares. The firm maintains Amazon as its top pick in the Internet space. This aligns with broader industry trends, as InvestingPro data shows Nvidia has achieved impressive 71.55% revenue growth in the last twelve months, reflecting the surging demand for AI computing infrastructure. InvestingPro offers comprehensive analysis on both companies through its Pro Research Reports, available for over 1,400 US equities.

The agreement represents approximately 3% of AWS’s estimated 2026 revenues at $5.4 billion per year. The partnership includes "the ability to expand further into 2027 and beyond," according to the press release, though it notably does not mention Amazon’s Trainium chips.

Amazon management framed the deal as pivotal for scaling AI reliably, reinforcing the company’s commitment to long-term AI infrastructure investment. More details about this and other AI infrastructure deals are expected at the AWS ReInvent conference in early December.

In other recent news, Nvidia Corporation is set to host its third-quarter fiscal 2026 earnings call on November 19, where it will discuss its financial results for the quarter ending October 26, 2025. This upcoming event is significant for investors eager to gain insights into the company’s performance. Meanwhile, Nvidia has received attention for its strategic partnerships and investments. The company plans to invest up to $1 billion in AI startup Poolside, a move that could significantly enhance Poolside’s valuation. Additionally, Nvidia is collaborating with Hyundai Motor Group on a $3 billion AI cluster initiative in South Korea, aiming to establish data and AI technology centers in the region.

In another development, Microsoft has secured approval to export Nvidia’s advanced AI chips to the United Arab Emirates, marking a notable step in its Middle East expansion. Analyst firm Cantor Fitzgerald has reiterated its Overweight rating on Nvidia, emphasizing the company’s attractive valuation despite concerns about an AI bubble. They highlighted that Nvidia trades at approximately 21 times their updated earnings per share estimate for calendar year 2026, which they consider inexpensive. These developments collectively underscore Nvidia’s ongoing influence and strategic positioning in the AI sector.

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