Amazon's AWS hit its fastest growth in 15 quarters at 28%, anchoring a $321.66 price target that implies 30% upside for AMZN.
Azure grew 40% and Google Cloud surged 63% in Q1, yet Amazon's forward P/E of 29 stays in line with both MSFT and GOOGL peers.
Andy Jassy says Trainium will save Amazon tens of billions in annual CapEx while adding hundreds of basis points in operating margin.
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Amazon (NASDAQ: AMZN) posted its fastest AWS growth in 15 quarters while committing to $200 billion in 2026 AI capex. That combination sits at the heart of my price target.
Our 24/7 Wall St. price target for Amazon is $321.66, implying 30.1% upside from the current $247.23. The model output carries a 90% confidence level, supported by AWS reacceleration, custom silicon monetization, and a valuation that has not caught up to earnings.
Amazon shares are up 7.11% year to date and 10.43% over one year, sitting 13% below the $278.56 52-week high.
Q1 2026 was the inflection. AWS revenue reached $37.6 billion, up 28% year over year, the fastest growth in 15 quarters. EPS of $2.78 beat the $1.73 estimate, and total revenue of $181.52 billion grew 16.6%.
Q1 net income was inflated by a $16.8 billion pre-tax Anthropic gain, and trailing free cash flow collapsed 95% to $1.2 billion as capex ran to $43.2 billion in the quarter alone. Q2 guidance calls for revenue of $194 billion to $199 billion with the next report on July 30, 2026.
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Bulls see three compounding catalysts. First, custom silicon: Trainium and Graviton chips run at over $20 billion annually with $225 billion in Trainium revenue commitments, including OpenAI and a $100 billion+ Anthropic deal. CEO Andy Jassy stated that Trainium will "save us tens of billions of dollars of CapEx each year and provide several hundred basis points of operating margin advantage."
Second, Bedrock processed more tokens in Q1 than all prior years combined, with 170% quarter-over-quarter spend growth.
Third, Amazon LEO and Zoox represent optionality. The bull-case 12-month target hits $369.61, a 49.5% return. Wedbush carries a $293 Outperform target.
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