Goldman Sachs Raises AMZN Stock Price Target to $375, Maintains Buy Rating

Goldman Sachs has raised its Amazon price target to $375 from $335 after Amazon posted stronger second-quarter results led by faster AWS growth, AI demand, and advertising gains.

Goldman Raises AMZN Stock Target After Q2 Results

Goldman Sachs maintained its Buy rating on Amazon after the company’s latest earnings report. The firm pointed to faster cloud growth, strong AI demand, and rising momentum in Amazon’s custom chip business. 

Amazon shares rose after the results as investors focused on AWS performance. The cloud unit grew 36.7% year over year to $42.2 billion, marking its fastest growth in 18 quarters. At press time, AMZN stock was up 4.19% to trade at $235.

Goldman also noted Amazon’s stronger 2026 capital spending plan of about $220 billion. The higher spending plan reflects continued investment in data centers, AI infrastructure, and custom silicon.

AWS backlog reached $496 billion, giving investors another measure of future cloud demand. Amazon’s AI revenue run rate rose to $25 billion from $15 billion in the prior quarter.

Like Goldman Sachs, Piper Sandler has also raised its Amazon target to $320 from $315 and kept an Overweight rating.

AWS Growth Supports Amazon’s AI Spending Plan

Amazon Web Services remained the main driver of the earnings reaction. AWS revenue reached $42.2 billion, beating expectations and accelerating from the previous quarter.

AWS operating margin reached about 39%, helped by stronger revenue and improved operating performance. The cloud unit also remained Amazon’s largest profit contributor during the quarter.

Amazon Chief Executive Andy Jassy said, “AWS is booming, growing 36.7% year-over-year in Q2.” The statement reflected rising demand for cloud infrastructure tied to AI workloads.

Jassy also said AWS could “very possibly be a trillion-dollar annual revenue business for us in time.” The comment came as Amazon continues spending heavily to meet computing demand.

Amazon’s custom chip business also reached a $25 billion annual run rate. Trainium and Graviton remain central to Amazon’s plan to lower AI infrastructure costs for customers.

Management said demand remains higher than available cloud capacity. Jassy said Amazon still will not “have enough capacity to meet all the demand we have in 2026.”

Revenue Tops $200B as Advertising Grows

Amazon reported second-quarter revenue of $200.6 billion, up about 20% from a year earlier. The total came above market expectations and reflected broad gains across major business lines.

North America sales rose 16% to $116.2 billion. International sales increased about 15% to $42.2 billion, while online store sales rose 14.6%.

Advertising revenue grew 26% to $19.8 billion. That business remains a key high-margin area for Amazon outside cloud computing. As a result, Bernstein has also lifted its Amazon price target to $320 from $315 and kept an Outperform rating, citing AWS’s 37% growth and stronger AI revenue momentum

Third-party seller services rose nearly 16% during the quarter. Subscription services increased 12.5%, helped by Prime demand and Amazon’s wider services base.

Amazon gave third-quarter revenue guidance between $197 billion and $202 billion. The company also guided for operating income between $22.5 billion and $26.5 billion.

Free cash flow remains under pressure as AI-related investment rises. Amazon recorded a trailing 12-month free cash outflow of $7.6 billion, compared with positive free cash flow last year.

The higher capex plan remains a key area for investors to track. However, analysts raised targets after AWS growth, AI revenue, backlog, and advertising performance improved in the quarter.