Amazon's AI Bet Wins Big As Analyst Sees $1 Trillion AWS Opportunity

benzinga_article
2026.07.31 16:06

Amazon stock surged over 15% following a strong Q2 earnings beat, driven by AWS backlog growth of 150% year-over-year to $496 billion. BNP Paribas analyst Nick Jones highlighted AWS's potential as a $1 trillion opportunity and maintained a Buy rating with a $345 price target. Amazon reported net sales of $201 billion and raised its 2026 capital spending outlook to $220 billion, citing AI infrastructure demands.

Amazon.com, Inc. (NASDAQ:AMZN) stock gained over 15% on Friday as investors reacted to a double beat in quarterly results and upbeat cloud/AI commentary.

BNP Paribas analyst Nick Jones said Amazon delivered a strong second quarter, with AWS momentum supporting higher AI-related investment and a path to a much larger cloud opportunity.

AWS Strength Supports The Bull Case

Jones kept a positive view on Amazon with a $345 price forecast, implying 46% upside from the July 30 price of $235.50.

He said Amazon beat expectations across the board, driven mainly by AWS and advertising services. Worldwide net sales reached $201 billion, about 2% above the $197 billion consensus estimate. AWS beat consensus by about 4%, while advertising services topped expectations by about 3%.

Jones said AWS backlog grew more than 150% year over year and 36% quarter over quarter to $496 billion, supporting Amazon’s elevated investment levels.

Amazon Profit And EBITDA Beat Expectations

Jones said operating income came in at $27.5 billion, about 16% above the $23.6 billion consensus estimate. Adjusted EBITDA reached $53.5 billion, about 5% above the $50.8 billion estimate.

He said Amazon remains positioned as a key implementation layer in the AI ecosystem, while its other businesses can benefit from AI integrations.

Jones also said management now sees AWS as at least twice its previous several-hundred-billion-dollar opportunity and potentially a $1 trillion business over time.

Guidance Reflects Prime Day Shift And Higher Capex

Jones said Amazon guided third-quarter worldwide net sales to $197 billion to $202 billion, with the midpoint about 2% below the $204 billion consensus estimate. However, he said growth would be about 400 basis points higher after excluding the Prime Day shift between 2025 and 2026.

Amazon guided operating income to $22.5 billion to $26.5 billion, with the midpoint slightly below the $25.1 billion consensus estimate. The company also raised its full-year 2026 capital spending outlook to $220 billion from $200 billion, citing higher memory costs.

Jones attributed Amazon’s after-hours gain to strong second-quarter results, robust AWS momentum and better visibility into favorable data-center return dynamics.

The stock carries a Buy rating with an average price forecast of $326.10. Recent analyst moves include:

  • DA Davidson: Neutral (Maintains forecast to $250.00) (July 31)
  • Wells Fargo: Overweight (Raises forecast to $328.00) (July 31)
  • Cantor Fitzgerald: Overweight (Lowers forecast to $320.00) (July 31)

Amazon Price Action

AMZN Stock Price Activity: Amazon.com shares were up 15.09% at $271.03 at the time of publication on Friday, according to Benzinga Pro data.

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