Amazon.com, Inc.

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Bullish +72

Is Amazon (AMZN) Stock a Buy After Jassy’s 40% AWS Growth Forecast?

AI infrastructure Cloud expansion Financial outlook AI-generated analysis

📈 AMZN shares closed up 2.06% at $250.69 on Tuesday, rebounding from a 15% decline since August.

💰 Q3 revenue reached $201.94 billion, slightly missing the $202.22 billion analyst estimate but growing 12.1% year-over-year.

☁️ AWS generated a record $45.9 billion in quarterly revenue, up 39% from the prior year.

🚀 CEO Andy Jassy forecast AWS growth exceeding 40% annually for both 2027 and 2028.

💾 AWS ended the quarter with a massive backlog of $578 billion in orders awaiting data center capacity.

🔧 Commitments for custom chips Graviton and Trainium rose 20 times from a year ago.

🤖 Amazon's AI service Bedrock saw Fortune 500 spending increase sevenfold and token volume up 17 times.

💸 Amazon plans to spend approximately $220 billion on data center buildout in 2026.

📉 Q3 earnings per share were $1.89, missing the $1.97 analyst consensus expectation.

🏦 Freedom Broker lifted its price target to $330 and Phillip Securities upgraded AMZN to Strong Buy.

📊 The forward price-to-earnings ratio is 22.8 with analysts projecting 2027 EPS of $10.58.

Bullish Signals
  • AWS revenue hit a record $45.9 billion in Q3, marking the sixth straight quarter of faster growth.
  • CEO Andy Jassy forecast AWS could grow more than 40% annually in both 2027 and 2028.
  • The company aims to reach $1 trillion in annual AWS revenue within five to 10 years.
  • Commitments for custom chips Graviton and Trainium rose 20 times from a year ago.
  • Bedrock is the fastest-growing multibillion-dollar business in AWS history with spending up sevenfold.
  • Analysts project 2027 earnings of $10.58 per share, indicating strong future profitability.
  • Freedom Broker lifted its price target to $330 and Phillip Securities upgraded the stock to Strong Buy.
Risk Factors
  • Q3 earnings per share of $1.89 missed the $1.97 analyst consensus expectation.
  • Revenue of $201.94 billion came in just under the $202.22 billion estimate.
  • The stock is down 15% from its August record high as of last Friday's close.
  • Amazon expects to spend about $220 billion on data center buildout in 2026, impacting near-term earnings.
Full Analysis
Amazon.com, Inc. (AMZN) shares rose 2.06% to close at $250.69 on Tuesday, recovering from a 15% pullback since its August record high. The stock's recent movement follows mixed third-quarter results released on October 29, where earnings per share of $1.89 missed the $1.97 analyst consensus, and revenue of $201.94 billion came in slightly below the $202.22 billion estimate. Despite the headline miss, Amazon's cloud computing unit, AWS, delivered a record $45.9 billion in quarterly revenue, representing a 39% year-over-year increase. This marks the sixth consecutive quarter of accelerating growth for the division, which is now operating at an annualized pace of $184 billion. CEO Andy Jassy highlighted a robust backlog of $578 billion in orders waiting for data center capacity, reinforcing the strength of the cloud business. Jassy provided optimistic long-term guidance, projecting AWS growth exceeding 40% annually through 2028 and aiming for $1 trillion in annual revenue within five to 10 years. The company is heavily investing in custom silicon like Graviton and Trainium chips, with commitments rising 20-fold year-over-year. Amazon expects significant capital expenditures of approximately $220 billion on data center buildout in 2026, anticipating higher returns and increased free cash flow over the long term. Analyst sentiment remains positive despite the recent stock dip, with Freedom Broker raising its price target to $330 and Phillip Securities upgrading the stock to Strong Buy. The consensus average price target stands at $321.02, reflecting confidence in Amazon's strategic investments and the enduring growth trajectory of its cloud division.