Amazon (AMZN) is back in the talks after the company enjoyed record-setting week that reignited confidence in its cloud business and artificial intelligence push.
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The stock has surged nearly 12% in four sessions, adding more than $300 billion in market value and hitting its first record high since February. The rally follows Amazon Web Services’ (AWS) strongest quarterly growth since 2022 and a new $38 billion cloud deal with OpenAI, which is a combination that has flipped sentiment around one of Amazon’s most critical units.
AWS Growth Restores Market Confidence
For much of 2025, investors worried AWS was losing ground to Microsoft’s Azure (MSFT) and Google Cloud (GOOGL). But the third-quarter report showed AWS revenue climbing 20% year-over-year, ending a long stretch of deceleration.
“Taken together, the results and OpenAI deal suggest that the acceleration in AWS growth could be sustainable,” said Robert Pavlik, senior portfolio manager at Dakota Wealth Management. “Investors are going to have to take Amazon more seriously when they’re considering how to invest in the AI space.”
AWS has always been Amazon’s profit engine, generating far more income than its retail business. Its rebound has now sparked a broader re-rating in the stock, especially after valuation multiples fell to decade lows in October.
Analysts See Room for More Upside
Amazon’s recent rally still leaves it trailing its “Magnificent Seven” peers, with the stock up about 14% year-to-date compared to 22% for the Nasdaq 100 (NDX). Yet analysts say that gap may not last long.
At about 27 times projected earnings, Amazon trades well below its 10-year average multiple of 47. Evercore ISI’s Mark Mahaney said the stock could “nearly double” if investor confidence continues to recover.
“With materially increasing odds that AWS has recovered to becoming a sustainably 20%+ revenue growth segment, the stock opportunity ahead is for a material AMZN re-rating,” Mahaney wrote.
AI Momentum Shifts Back to Seattle
The new OpenAI agreement adds new fuel to Amazon’s AI ambitions and puts it back in direct competition with Alphabet (GOOGL), Microsoft (MSFT), and Oracle (ORCL). All reported healthy cloud growth in recent quarters, but Amazon remains the largest player by market share.
For some fund managers, the turnaround is reason enough to rotate back into the stock. “The cloud business is back, and if you look around the Mag 7 landscape, I think Amazon has gone from the laggard to the leader,” said Matt Tuttle, CEO of Tuttle Capital Management. “Which do you want to buy right now? For me, it’s Amazon.”
Is Amazon a Good Stock to Buy Now?
Analysts remain firmly bullish on Amazon (AMZN). Out of 42 Wall Street analysts who issued ratings in the past three months, all 42 recommend buying the stock, giving it a “Strong Buy” consensus.
The average 12-month AMZN price target stands at $295.35, implying an 18.05% upside from the latest close.
