Amazon (AMZN) could be the biggest winner from the AI boom, according to Bank of America analyst Justin Post. Post, a five-star analyst on TipRanks, reiterated a Buy rating on Amazon stock with a $310 price target.
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200% short exposure to AMZN with AMZOThe analyst said Amazon Web Services (AWS) is set to add more AI data center capacity than Alphabet (GOOGL) and Meta Platforms (META) over the next two years. He also expects AWS to build that capacity at a lower cost than its peers. The firm added that demand for AI training, inference, cloud workloads, and internal AI products remains “supply constrained,” which should keep AI spending strong.
Amazon Is Set to Lead the AI Buildout
BofA expects Amazon to add about 15 gigawatts (GW) of AI data center capacity in 2026 and 2027. That compares with about 9GW for Alphabet and 6GW for Meta. The firm said Amazon has the biggest chance for “capacity driven incremental revenue growth” because it is adding more capacity than its peers.
The report also projects Amazon’s total installed capacity will reach about 58GW by 2030, ahead of both Alphabet and Meta.
AWS Has a Cost Edge
BofA believes Amazon has an edge when it comes to building AI data centers. The firm estimates AWS spends about $25 billion to add one gigawatt of capacity. That compares with about $37 billion for Alphabet and $45 billion for Meta. BofA said AWS benefits from its “scale advantage,” custom Trainium and Graviton chips, and a broader mix of cloud workloads, helping keep costs lower.
Post also raised its 2027 capital spending forecast for AWS to $230 billion, up from $196 billion. It pointed to strong demand for AI training, cloud services, and AI products. It also cited reports that AWS has asked server suppliers to increase third-quarter shipments.
Is Amazon Stock a Buy?
According to TipRanks, Amazon stock has a Strong Buy consensus rating based on 44 Buy and one Hold rating. The average AMZN stock price target of $319.02 implies 30% upside potential from current levels.
