Here’s a revamped version of the article, presented with a CNBC-esque flair and expanded with deeper business and technology analysis:
**Amazon Stock: BMO’s Cloud Forecast Ignites Buy Signal for Investors**
The investment landscape for Amazon shares is signaling a potential turning point, with recent analysis from BMO Capital Markets suggesting a compelling opportunity for investors. Jim Cramer, a prominent voice in the financial commentary space, recently highlighted BMO’s upgraded outlook on Amazon Web Services (AWS), calling it a “clarion call to buy” the stock that has thus far lagged behind its “Magnificent Seven” peers in the current year.
While Amazon has experienced a year of underperformance relative to its high-profile tech counterparts, primarily due to concerns surrounding the growth trajectory of its cloud computing division, the third quarter offered a glimmer of renewed momentum. This reacceleration in AWS is precisely why many are positioning Amazon for a significant rebound in the coming year.
BMO Capital Markets analysts have now projected a robust 24% revenue growth for AWS in the first fiscal quarter of 2026, an upward revision from their previous 23% estimate. Their insights, gleaned from discussions with former AWS employees, point towards significant upside in Amazon’s high-margin cloud business. This optimism is fueled by the anticipation of “meaningful acceleration in customer cloud commitments” in the immediate future.
Current market consensus, as reported by FactSet, aligns with this positive outlook. AWS is expected to achieve 22.4% growth in the first fiscal quarter, building on an estimated 21% increase in the fourth quarter. This follows a stronger-than-expected Q3 performance, where cloud computing revenue rose 20.2% year-over-year – a growth rate not seen since 2022 – surpassing earlier forecasts of an 18.1% advance.
The market’s initial reaction to Amazon’s late October earnings report was a surge of nearly 14% in the subsequent two trading sessions, culminating in a record high of $254 on November 3rd. However, the stock has since retraced, settling back to pre-earnings levels around $222. Despite this pullback, the underlying sentiment remains bullish.
“If you could get 30 times earnings with some certainty about AWS growing, then [Amazon CEO Andy Jassy] is going to get his way out of this thing. It’s going to be terrific,” Cramer stated, underscoring the potential for significant shareholder value creation if AWS maintains its growth trajectory. Currently, Amazon is trading at approximately 28 times its estimated fiscal 2026 earnings per share, a valuation that BMO’s analysis suggests could be attractive given the projected AWS rebound.
**The AI Catalyst: Anthropic and the Future of Cloud Dominance**
A critical factor supporting the anticipated AWS growth, as identified by BMO, is the increasing adoption of advanced artificial intelligence models. Specifically, the availability of Anthropic’s Claude model on AWS is proving to be a significant draw for developers. Claude, a sophisticated large language model (LLM), represents a key component in the expanding AI ecosystem hosted on cloud infrastructure.
Amazon’s strategic $8 billion investment in Anthropic is seen as a pivotal move that positions AWS to not only maintain but potentially strengthen its leadership in the competitive cloud market. This investment demonstrates a clear commitment to embedding cutting-edge AI capabilities within its service offerings, a strategy that is crucial for retaining and attracting enterprise clients increasingly focused on AI integration.
In light of these developments, BMO not only raised its revenue estimates for AWS but also increased its price target for Amazon shares by $3 to $303, reiterating its “outperform” rating. This aligns with a broader positive sentiment among those closely watching the company’s strategic direction and its ability to capitalize on the burgeoning AI revolution.
This forward-looking perspective is echoed by market observers who see Amazon’s diversified business model, coupled with the re-energizing force of AWS and its AI partnerships, as setting the stage for substantial growth. The company’s capacity to innovate across e-commerce, cloud services, and emerging technologies like artificial intelligence positions it as a key player in the digital economy’s ongoing transformation.
Original article, Author: Tobias. If you wish to reprint this article, please indicate the source:https://aicnbc.com/14616.html
