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Investing.com - HSBC raised its price target on Amazon.com (NASDAQ:AMZN) to $300.00 from $285.00 while maintaining a Buy rating, following news of a major cloud services deal. The new target aligns with the broader analyst consensus, as Amazon currently trades at $254, with analysts setting targets as high as $351.87 and maintaining a strong buy recommendation of 1.3 (on a scale where 1 is Strong Buy).
AWS, Amazon’s cloud computing division, has secured a seven-year $38 billion agreement to supply OpenAI with cloud capacity, according to HSBC analyst Paul Rossington. This deal comes as Amazon shares have shown significant momentum, posting a 10.8% return over the past week and trading near its 52-week high of $258.60.
OpenAI will begin using AWS services immediately, with all planned capacity expected to come online by the end of 2026, and potential for further expansion in 2027 and beyond.
HSBC noted that AWS’s ability to secure this deal stems from its significant infrastructure investments, having added 3.8GW of capacity in the past 12 months—more than any other western cloud service provider—with plans to add another 1GW in Q4.
AWS has doubled its capacity over the past three years and expects to double it again by the end of fiscal year 2027, according to details shared during Amazon’s Q3 results last week.
In other recent news, Amazon announced a multi-year strategic partnership with OpenAI, valued at $38 billion. This agreement will have Amazon Web Services (AWS) provide OpenAI with Amazon EC2 UltraServers to support and scale its artificial intelligence workloads. Additionally, Amazon’s third-quarter revenue trends surpassed expectations, with AWS experiencing a 20% growth rate on a foreign-exchange neutral basis. This marks AWS’s highest growth rate since 2022 and demonstrates greater acceleration compared to competitors like Microsoft Azure and Google Cloud Platform.
Further developments include a significant $5.5 billion, 15-year lease agreement between Amazon Web Services and Cipher Mining. This deal will provide 300 megawatts of capacity for AI workloads, with delivery expected in phases starting in July 2026. Analyst firm William Blair reiterated an Outperform rating for Amazon, citing its competitive advantages and attractive valuation. Meanwhile, Wedbush raised its price target for Amazon to $340, maintaining an Outperform rating due to the strategic partnership with OpenAI.
Benchmark and Stifel also increased their price targets for Amazon to $295, reflecting confidence in Amazon’s business trajectory and AWS growth. Stifel noted that AWS’s recent performance showed a reversal of the pattern seen in the second quarter. These recent developments highlight Amazon’s strategic moves and continued growth in its cloud services segment.
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