E-commerce and cloud computing giant Amazon (AMZN) impressed investors with its market-beating third-quarter results, with strong growth in its Amazon Web Services (AWS) cloud computing unit. Top analysts at Evercore and Canaccord raised their price targets for Amazon stock following the impressive Q3 print. AMZN stock jumped 9.6% on Friday, bringing the year-to-date increase in share price to 11.3%.
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Notably, the 20% jump in Q3 AWS revenue addressed concerns about intensifying competition from Microsoft’s (MSFT) Azure and Alphabet’s (GOOGL) Google Cloud. Amazon CEO Andy Jassy stated that AWS is “growing at a pace we haven’t seen since 2022,” thanks to artificial intelligence (AI)-led demand.
Top Evercore Analyst Boosts Amazon Stock Price Target
Evercore analyst Mark Mahaney increased the price target for Amazon stock to $335 from $280 and reiterated a Buy rating, saying that it remains a Top Pick. Impressed by the performance, the 5-star analyst called Q3 the “AWS Unlock Quarter,” adding that “now the Amplification Catalysts can take over.” Mahaney noted the Q3 beat and that Q4 revenue and operating income guidance bracketed the Street’s estimates. He highlighted that fundamental trends were generally positive in Q3, with top-line growth consistent with the second quarter and operating margin at record highs.
Among the key takeaways, Mahaney noted the 20% year-over-year AWS growth was the fastest in 11 quarters, with the quarter-over-quarter growth in dollars handily outpacing Azure for the first time since the third quarter of 2022. He also pointed out that the backlog reached $200 billion and that October deal volume was greater than all of Q3. Furthermore, Trainium2 revenue surged 150% quarter-over-quarter. “The AI narrative has flipped positive for AWS,” said Mahaney.
Mahaney also mentioned the robust performance of Amazon’s retail business, citing “very consistent” double-digit revenue growth in North America and International segments. Interestingly, Amazon stated that its shopping chatbot Rufus is on track to deliver over $10 billion in incremental annualized sales. Finally, Mahaney highlighted the rapid growth in Amazon’s advertising revenue.
Canaccord Analyst Sees More Upside in AMZN Stock
Canaccord Genuity analyst Maria Ripps increased the price target for Amazon stock to $300 from $280 and reaffirmed a Buy rating. The 5-star analyst stated that in what was a pivotal quarter for AWS amid rising investor concerns about its business lagging in AI-centric workloads, the cloud unit saw its growth accelerate about 270 basis points quarter-over-quarter to over 20%, representing the segment’s largest growth rate in 11 quarters. Ripps noted the robust backlog at the end of Q3 and the addition of more than 3.8 gigawatts of power in the past 12 months, with another gigawatt anticipated to come online in Q4, and management expecting to double power capacity by 2027.
Ripps highlighted the surge in Trainium2 revenue and stated that it is now a “fully subscribed, multibillion-dollar business.” Further, Trainium3, which is expected to be 40% more cost-efficient, is on track to be previewed at the end of the year, with management expecting it to drive demand from medium-sized businesses.
The top-rated analyst also noted the strength in online stores, with momentum in Everyday Essentials, and sequential acceleration in advertising revenue growth by 60 basis points amid momentum with Prime Video and Amazon DSP. Given greater visibility into further AWS acceleration in Q4 and 2026, Ripps expects AMZN stock to gain momentum as investor confidence rebuilds.
Is Amazon Stock a Buy, Sell, or Hold?
With 41 unanimous Buys, Wall Street has a Strong Buy consensus rating on Amazon stock. The average AMZN stock price target of $292.26 indicates 20% upside potential.
