Barclays analysts have named Amazon (AMZN) as a likely outperformer among mega-cap tech stocks, driven by accelerating growth in its Amazon Web Services (AWS) cloud division and a rapidly expanding custom chip business. The British bank's client note expressed confidence in "AWS upside from AI over coming years," highlighting that AWS has reached a $15 billion annualized revenue run rate for AI services alone.
Further bolstering the bull thesis, Amazon plans to deploy more than one million Nvidia processors by 2027, which Barclays estimates could eventually translate to $100 billion in annual AWS revenue. The company's custom chip business, including its Trainium AI chips and in-development CPUs, has also seen explosive growth, now carrying a $20 billion external revenue run rate—doubling in just three months. When internal use is included, Amazon states the business is closer to $50 billion.
AWS revenue grew 24% year-over-year in Q4 2025, its fastest pace in over three years, fueled in part by a large facility built for AI partner Anthropic. On the valuation front, Amazon trades at a forward P/E of 32, which analysts consider historically low. Notably, it now trades at a discount to retailers Walmart and Costco despite faster growth, with North American operating margins improving to 9% in Q4.
Ahead of Q1 2026 earnings on April 29, analyst sentiment is overwhelmingly positive. Truist raised its price target to $285, projecting 25% AWS revenue growth for the quarter driven by AI workloads from partners like OpenAI and Anthropic. TD Cowen's John Blackledge reiterated a Buy rating with a $300 target, expecting Q1 results to beat consensus estimates, driven by high-margin advertising and AWS.
Wall Street consensus is a Strong Buy, with an average price target of ~$284.77, implying roughly 14-15% upside from recent levels around $250. The stock has surged 20% in April alone, closing near its all-time high. Separately, Amazon has agreed to acquire satellite firm Globalstar for ~$12 billion and signed a satellite connectivity deal with Apple, positioning itself in the space-based broadband market.
