Key Takeaways
- Bank of America maintains Buy rating on Amazon with $310 price objective
- AWS projected to deploy approximately 15GW of AI data center capacity during 2026–2027, surpassing Alphabet and Meta
- BofA calculates AWS capacity construction costs at roughly $25B per GW, significantly below Alphabet ($37B) and Meta ($45B)
- Needham reaffirms Buy rating with $300 price objective, highlighting robust AWS compute demand
- Amazon secured $25 billion in debt financing to support AI infrastructure expansion
Bank of America’s Justin Post believes Amazon is positioned to emerge as the dominant player in the artificial intelligence infrastructure race. Post maintained his Buy recommendation on Amazon shares with a $310 price objective in a Tuesday research note.
The analyst’s thesis revolves around AWS and its capacity to deploy greater AI data center infrastructure than competitors — while maintaining a significant cost advantage.
Amazon shares were changing hands near $246, climbing 0.75% during Tuesday’s session. The consensus Wall Street price objective stands at $319.02, suggesting approximately 30% potential upside from present levels.
Bank of America forecasts Amazon will deploy roughly 15 gigawatts of AI data center capacity between 2026 and 2027. This substantially exceeds Alphabet‘s estimated 9GW and Meta’s projected 6GW over the same period.
Looking toward 2030, BofA anticipates Amazon’s total installed capacity will reach approximately 58GW, maintaining its lead over both competitors.
The investment bank also contends Amazon is executing this expansion more cost-effectively than its peers.
AWS Maintains Significant Cost Efficiency
Bank of America calculates that AWS spends approximately $25 billion to deploy one gigawatt of infrastructure capacity. By comparison, Alphabet’s cost structure runs around $37 billion per GW, while Meta approaches $45 billion.
The firm attributes Amazon’s cost leadership to its proprietary Trainium and Graviton processor technologies, operational scale advantages, and diversified cloud service portfolio.
Post increased his 2027 capital expenditure projection for AWS to $230 billion from a previous $196 billion estimate. Industry reports indicating AWS requested server manufacturers boost third-quarter deliveries by as much as 30% supported this upward revision.
Bank of America also observed that demand across AI training, inference processing, cloud infrastructure, and internal AI applications remains “supply constrained.” This dynamic should sustain elevated capital spending throughout the technology sector.
Needham Echoes Bullish Stance
Needham independently reaffirmed its Buy rating and $300 price target on Tuesday, likewise emphasizing strong compute demand at AWS.
The firm highlighted Amazon’s $25 billion debt offering as unmistakable evidence that AWS compute demand continues exceeding available supply.
Needham went further, recommending Amazon reduce capital allocation to competing initiatives and concentrate resources entirely on AWS — which the firm considers the business unit delivering the highest return on invested capital across Amazon’s portfolio.
Amazon’s return on invested capital currently measures 13%, while its debt-to-equity ratio stands at 0.53.
AWS released multiple product enhancements this week, including general availability of Anthropic Claude Sonnet 5 through Amazon Bedrock, updated Amazon WorkSpaces featuring AI Agent functionality, and expanded artificial intelligence capabilities throughout SageMaker.
Fitch Ratings assigned Amazon an ‘AA-‘ credit rating on its recently issued unsecured notes, referencing its commanding market positions in e-commerce and cloud computing.
Amazon currently carries a Strong Buy consensus rating on TipRanks, supported by 44 Buy recommendations and one Hold rating.
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