Wall Street Eyes Amazon’s Cloud Surge as Price Target Climbs to $304

A prominent Wall Street firm has significantly raised its valuation outlook for Amazon, signaling potential for a substantial re-rating of the tech conglomerate's shares. Analysts at BMO Capital Markets have set a new price target of $304, citing considerable upside from current levels. This bullish stance is driven not by the core retail business, but by the accelerating momentum of its highly profitable cloud computing division, Amazon Web Services (AWS).

Market observers are closely watching Amazon's massive investment strategy. The company is projected to allocate approximately $125 billion in capital expenditures (capex) for 2025. These enormous sums are widely interpreted as a necessary bet on building out artificial intelligence infrastructure. According to analysts, this investment is now starting to translate into tangible returns, evidenced by an acceleration in revenue growth.

The disparity between Amazon's lower-margin retail operations and its high-profit cloud segment is a key focus. While e-commerce delivers volume, AWS generates the profitability required to fund the company's expansive investment plans.

AWS Growth Defies Conservative Forecasts

The centerpiece of the optimistic analysis is AWS. BMO forecasts that the cloud unit will post revenue growth of 24 percent for the first quarter of 2026. This estimate suggests that enterprise demand for cloud infrastructure and AI services is exceeding previously conservative expectations. Furthermore, Amazon appears to be successfully defending its market position against intense competition from rivals Microsoft Azure and Google Cloud.

Should investors sell immediately? Or is it worth buying Amazon?

The performance of AWS is seen as the primary engine for Amazon's future earnings, with its growth trajectory even gaining speed.

Share Performance and the Path Forward

Despite the positive analyst commentary, Amazon's stock has faced headwinds in recent months. Shares closed at €194.20 on Friday, reflecting a decline of roughly 9.5 percent since the start of the year. The current price sits nearly 17 percent below its 52-week high of €233.20, highlighting the significant ground the stock would need to cover to reach BMO's new target.

In the coming months, investor attention will be fixed on capital allocation efficiency. The critical test for Amazon will be demonstrating that its planned $125 billion in investments can generate the forecasted returns and sustainably propel the share price toward the new $304 benchmark.