BMO Keeps Outperform on Amazon (AMZN), Sees AWS Growth Accelerating

Amazon.com, Inc. (NASDAQ:AMZN) is included among the 12 Best Long Term US Stocks to Buy Now.

BMO Keeps Outperform on Amazon (AMZN), Sees AWS Growth Accelerating

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On December 16, BMO Capital raised its price target on Amazon.com, Inc. (NASDAQ:AMZN) to $304 from $300 and kept an Outperform rating on the stock. The update followed recent calls with two former AWS employees. Those conversations pointed to faster-growing cloud commitments, Claude emerging as a preferred model among developers, and expectations that enterprise AI applications could start scaling in 2027. Based on that feedback, BMO lifted its AWS growth assumption to 24%, up from 23%.

Separately, Reuters reported that Amazon.com, Inc. (NASDAQ:AMZN) is in discussions about investing in OpenAI. The talks could value the ChatGPT maker at more than $500 billion, according to a source familiar with the matter. Amazon may invest around $10 billion, though the source said the discussions remain fluid and could still change. The talks are private, and neither side has confirmed details.

The potential investment underscores how intense demand for computing power has become as companies push to build increasingly advanced AI systems. Several large tech firms have already made major commitments. NVIDIA and Oracle have each signed multi-billion-dollar AI deals with OpenAI this year. In November, OpenAI also agreed to a $38 billion cloud services deal with Amazon.

These discussions come as OpenAI prepares the groundwork for a possible IPO, which could value the company at as much as $1 trillion, according to an earlier Reuters report.

While we acknowledge the potential of AMZN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AMZN and that has a 100x upside potential, check out our report about the cheapest AI stock.

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Disclosure: None.