Key Highlights
- KeyBanc analyst elevated Amazon’s price target from $285 to $325, suggesting approximately 30% upside potential from present trading levels.
- Anthropic’s recurring revenue skyrocketed from $9B in December 2025 to reach $30B by April 2026, providing substantial support to AWS performance.
- Analysts at KeyBanc calculate that AWS captures approximately 60% of Anthropic’s total infrastructure expenditures.
- CEO Andy Jassy suggested plans to offer Trainium chips to external buyers, with chip-related revenue already topping $20B via AWS operations.
- Shares of Amazon declined 1.4% Monday to close at $247.18, trading approximately 1.4% beneath the record closing level achieved in November 2025.
Analysts are expressing increased confidence in Amazon ahead of its April 29 quarterly report, propelled primarily by remarkable expansion at AI developer Anthropic combined with robust AWS performance.
KeyBanc’s Justin Patterson upgraded his Amazon valuation to $325 from $285 over the weekend. This target represents approximately 30% above Monday morning’s trading price.
Patterson simultaneously increased his revenue projections for 2026 by 1% and for 2027 by 2%.
Amazon stock fell 1.4% during Monday’s session to $247.18, pressured by widespread market concerns regarding escalating U.S.-Iran geopolitical tensions. Friday’s close stood at $250.56 — merely 1.4% away from the November 2025 all-time closing peak.
The backdrop entering this earnings cycle presents an intriguing opportunity.
Anthropic has emerged as a significant contributor to the AWS narrative. The company’s annual recurring revenue soared from $9 billion last December to $30 billion by early April 2026 — growth momentum that commands attention.
KeyBanc’s analysis indicates AWS receives approximately 60% of Anthropic’s complete infrastructure spending. This represents substantial revenue flow connected to one of the world’s fastest-expanding AI enterprises.
Anthropic has maintained aggressive product development. The company launched Claude Opus 4.7 this month — representing its most sophisticated reasoning architecture to date. Additionally, it introduced Claude Mythos, a “hyper-agentic” system that Anthropic has restricted from public deployment based on national security considerations.
AWS Momentum Building
Patterson highlighted his expectation for a “combination of capacity gains, AI diffusion, and client expansion” to propel AWS during the first quarter. His forecast targets 30% year-over-year expansion for AWS — representing acceleration from 2025, when AWS generated $128.7 billion in annual revenue, marking 20% growth versus the previous year.
Encouraging earnings from Taiwan Semiconductor (TSM) last week reinforced expectations that AI infrastructure appetite remains vigorous entering reporting season.
Wedbush’s Dan Ives supported this perspective. “We are seeing no cracks in AI demand on the chips/hardware or software front,” he stated, characterizing conditions as a “bright green light” for holding leading technology stocks.
Trainium Chips and Satellite Expansion
Amazon’s Trainium processor division has already crossed $20 billion in AWS-channeled revenue, expanding at triple-digit annual rates. Jassy mentioned in his recent shareholder communication that the company is exploring opportunities to distribute Trainium chips to outside customers — representing a possible additional revenue stream.
Regarding consumer operations, KeyBanc highlighted sustained grocery momentum alongside the forthcoming introduction of Amazon Leo, the company’s satellite broadband offering. Amazon recently announced plans to acquire Globalstar, securing additional spectrum assets to facilitate Leo’s deployment.
Patterson identified one notable concern: the continuing Iran situation has disrupted maritime traffic through the Strait of Hormuz while elevating fuel expenses. He anticipates this will influence Amazon’s second-quarter outlook. The company’s 3.5% fuel adjustment applied to third-party merchants earlier this month may partially mitigate this impact.
Amazon will release first-quarter financial results on April 29.
