Amazon’s stock surged to a fresh 52-week peak on Friday, propelled by two blockbuster artificial intelligence deals that underscore the company’s aggressive push to dominate the cloud computing and AI infrastructure markets. The shares closed at €225.40 in European trading, up 3.42% on the day, and have now gained nearly 17% since the start of the year.
The rally was fueled by a pair of strategic announcements that together reshape Amazon’s competitive positioning against rivals Microsoft and Google. First, the company revealed a massive expansion of its partnership with AI startup Anthropic, the developer of the Claude family of large language models. Under the terms of the agreement, Anthropic has committed to spending $100 billion on Amazon Web Services cloud infrastructure over the next decade. In exchange, Amazon is injecting an additional $5 billion into the startup, bringing its total investment to $13 billion, with the potential to invest up to $25 billion as Anthropic hits commercial milestones.
Crucially, Anthropic will rely exclusively on Amazon’s homegrown Trainium and Inferentia chips for training and running its future models, bypassing external GPU suppliers. The centerpiece of this hardware strategy is “Project Rainier,” a massive computing cluster that will link nearly half a million Trainium2 processors. Amazon is betting that its proprietary silicon can deliver superior cost and performance versus traditional Nvidia-based systems, a pitch that could prove decisive for enterprise customers using Anthropic’s models through the Amazon Bedrock platform.
Separately, Amazon locked in another marquee customer for its chip business: Meta. The social media giant will deploy Amazon’s Graviton processors across its AI systems, committing to tens of thousands of cores in a deal reportedly worth billions. Meta now becomes one of the largest buyers of Amazon’s in-house silicon, a significant endorsement of the chip strategy.
Analysts have responded with a flurry of price target upgrades. BMO’s Brian Pitz lifted his target to $315, citing accelerating AWS growth in the first half of 2026. UBS’s Stephen Ju raised his target to $304, projecting AWS will expand at a 38% clip next year — well above the consensus estimate of 26% — and arguing that the Anthropic and OpenAI partnerships could add roughly $200 billion to Amazon’s order backlog. Oppenheimer also boosted its target, pointing to surging AI demand in the cloud segment. The median analyst target on the stock, according to LSEG, stands at $282.
Should investors sell immediately? Or is it worth buying Amazon?
The timing of the announcements is no coincidence. Amazon is set to report first-quarter earnings on April 29, and expectations are running high. The market is looking for revenue of approximately $188 billion, representing year-over-year growth of about 14%, with earnings per share of $1.63. AWS alone is forecast to generate around $36.8 billion in revenue at a margin of nearly 36%.
Advertising remains another powerful growth engine. In the fourth quarter of 2025, ad revenue jumped 22% to $21.3 billion, pushing the full-year total past $68 billion.
Yet the soaring expectations come with a sobering reality check on costs. Amazon has earmarked roughly $200 billion in capital expenditures for 2026 — nearly four times its 2023 level. Analysts warn that such aggressive spending could push free cash flow into negative territory. A disappointing quarterly report or a cautious second-quarter outlook would likely pressure the stock.
Morningstar, which rates the shares at three stars, sees fair value at $260 — below the current trading level. Adding to the caution, insiders have sold $28 million worth of Amazon stock over the past three months without a single insider purchase.
The April 29 earnings release will test whether Amazon’s AI wager can justify the enormous investment. The market has already priced in a transformative narrative, but the numbers — particularly AWS margins and the trajectory of capital spending — will determine whether the stock can hold its newfound altitude.
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