Amazon (NASDAQ:AMZN) is making a decisive push to strengthen its footing in the AI arms race, and the scale of the commitment is hard to ignore.
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Trade AMZN with leverageThat’s exactly why Bank of America’s Justin Post, an analyst ranked among the top 1% on Wall Street, believes investors should start paying closer attention. Post views the latest developments as a meaningful vote of confidence in AWS’s long-term positioning, particularly when it comes to monetizing the massive wave of AI-driven demand.
Amazon revealed on Monday that Anthropic has committed to spending more than $100 billion on AWS over the next decade. The agreement also includes AWS providing up to 5 gigawatts of power capacity to support both the training and deployment of Anthropic’s models. That infrastructure buildout will involve tens of millions of Graviton cores, alongside a major rollout of Trainium3 capacity later this year, with access expanding to future generations of Trainium chips. On top of that, Amazon plans to invest up to an additional $25 billion into Anthropic, adding to the $8 billion already committed, with $5 billion paid upfront and the remaining $20 billion tied to commercial milestones.
Looking at the broader picture, Post argues the Anthropic deal reinforces the credibility of AWS’s custom silicon strategy, especially following OpenAI’s earlier $100 billion, eight-year commitment.
“We think the Anthropic and OpenAI deals should give Amazon investors greater confidence in future capex revenue generation, though Amazon’s stock price could be impacted by sentiment changes for each company,” the 5-star analyst went on to say.
Post also believes these large-scale customer commitments could push Amazon’s capital spending outlook higher. Heading into the April 29 earnings report, the analyst expects the company to maintain or potentially raise its 2026 capex guidance from the $200 billion level. With OpenAI pointing to about 2 gigawatts of Trainium demand and Anthropic outlining up to 5 gigawatts, the combined pull could account for a meaningful share of the roughly 15 gigawatts Amazon is expected to build through 2027. Even if some of that demand is already embedded in the outlook, Post sees the sheer scale – along with rising memory costs – as a setup that could drive upward revisions to the 2026 capex forecast over time.
The deal also signals confidence in Trainium’s capabilities and cost advantages, with Anthropic further committing to AWS’s first-party chip following a “seemingly successful collaboration” on Project Rainier. While Post sees the company maintaining or raising its capex outlook, CEO Andy Jassy has previously said Trainium could reduce Amazon’s annual capex by “tens of billions” and deliver several hundred basis points of operating margin improvement compared to alternative chips. “Importantly,” says Post, “these disclosures suggest that possible incremental (Trainium-driven) capex should have better returns than that with 3P chips.”
Post expects management to “reinforce this ROI narrative” on the upcoming Q1 call. A key area of focus for the earnings call will be the expected margins and returns from Amazon’s two major AI deals, which the analyst views as “quite competitive.”
All told, the BofA analyst assigns AMZN shares a Buy rating, while his $298 price objective points toward 12-month returns of 18%. (To watch Post’s track record, click here)
The Street’s average price target lands a little lower; at $286.74, the figure suggests one-year gains of ~14%. Based on a lopsided mix of 42 Buys vs. 3 Holds, the analyst consensus rates the stock a Strong Buy. (See AMZN stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.