Amazon.com Inc. (AMZN) just got a wave of Wall Street love after its AWS re:Invent conference, where the company laid out an ambitious roadmap for custom chips and autonomous AI agents. Three major analysts raised their price targets Wednesday, convinced that Amazon is finally closing the gap in the AI race.
Bank of America Securities analyst Justin Post bumped his price target from $272 to $303 while maintaining a Buy rating. JP Morgan's Doug Anmuth set his sights at $305 with an Overweight rating. Wedbush's Scott Devitt went highest, reiterating Outperform with a $340 target.
The Agent-Driven Future Takes Shape
What got analysts excited? Amazon CEO Matt Garman made a bold prediction that enterprises will soon deploy "billions" of autonomous agents. To back that up, AWS released three new frontier agents designed to handle security, DevOps, and business continuity tasks without human intervention.
Post from Bank of America noted the keynote revealed "significant AI substance" as AWS pivots toward this agent-driven future. Despite no major OpenAI announcement materializing, he remained bullish on the hardware and agent capabilities positioning Amazon to capture surging demand. He's expecting AWS revenue growth to accelerate toward 25% in 2026 as the company brings more capacity online.
Custom Chips Get Serious
The real hardware news centered on Amazon's Trainium chips, which are looking increasingly competitive. Trainium 3 just hit general availability with 4.4 times the compute performance of its predecessor. That's not incremental improvement—that's the kind of leap that makes customers reconsider their infrastructure spending.
But here's where it gets interesting: Amazon announced that its upcoming Trainium 4 chips will feature Nvidia Corp. (NVDA) interoperability and NVLink Fusion connectivity to boost system speed. Rather than treating Nvidia as pure competition, Amazon is deepening its collaboration with the GPU giant. It's a pragmatic move that gives customers flexibility while Amazon continues developing its own silicon.
Anmuth from JP Morgan highlighted that improved PyTorch integration is accelerating customer adoption of these custom chips. He argued that Amazon is "successfully tightening the competitive gap" through these performance gains, the strength of its Bedrock platform, and deep partnerships with Anthropic and OpenAI. He projected AWS revenue will grow 23% in both Q4 and 2026—a figure he suggested might actually be conservative.
AI Factories Come to Your Data Center
Amazon introduced a new "AI Factories" concept that lets customers deploy dedicated AWS infrastructure—including both Nvidia and Trainium chips—directly into their own data centers. This addresses a real pain point: companies that need secure, low-latency access to AI compute but can't or won't move everything to the cloud.
The company also launched its Nova 2 foundation models, expanding the ecosystem beyond just infrastructure. Anmuth called these launches "critical expansions" that reinforce his view that secular growth and new AI workloads will accelerate AWS momentum.
Capacity Constraints as a Good Problem
Devitt from Wedbush was impressed by the pace of innovation, calling Amazon's "clear focus" on broadening AI capabilities a validation of his bullish thesis. He expects 2026 to be a catalyst year that drives shares toward his $340 target.
Notably, Devitt pointed out that AWS growth would have been even stronger if not for capacity constraints—the kind of problem every business wants to have. With AWS already surpassing a $130 billion run rate and doubling its capacity relative to 2022, he projected 22% year-over-year growth next quarter as demand accelerates across the AI stack. The growing backlog and higher 2025 capex guidance signal robust demand that Amazon is racing to meet.
Price Action: Amazon shares were down 0.84% at $232.45 at the time of publication Wednesday.