Amazon.com Inc.’s (NASDAQ:AMZN) booming cloud and artificial intelligence pipeline is set to take center stage next week, as Wall Street finds the company’s latest pullback overlooks strong Amazon Web Services momentum and rising demand tied to major partners like Anthropic and OpenAI.
JP Morgan analyst Doug Anmuth maintained an Overweight rating on Amazon with a price forecast of $305.
The analyst says Amazon’s stock post-earnings pullback doesn’t reflect the company’s accelerating cloud and AI momentum, especially after AWS posted its fastest growth in nearly three years during the third quarter.
Also Read: Amazon Plans Huge AI Upgrade To Transform Federal Intelligence And Security
Drivers Behind Recent Stock Weakness
He attributes the recent decline partly to noisy market conditions surrounding Amazon’s $15 billion debt raise, increasing competition tied to Anthropic’s partnerships with Nvidia Corp. (NASDAQ:NVDA) and Microsoft Corp.’s (NASDAQ:MSFT) Azure, and investor concerns over the timing of Amazon’s next-generation Trainium 3 AI chip.
Anmuth expects AWS to expand and reinforce its AI strategy during next week’s re:Invent conference, where he anticipates important updates focusing on Trainium timing and performance, growth tied to Anthropic, and Amazon’s broader AI stack.
The analyst says Amazon plans to preview Trainium 3 by late 2025, with more volume coming in early 2026.
Amazon claims Trainium 3 will deliver roughly 40% better price-performance than Trainium 2, which already grew revenue more than 150% quarter-over-quarter.
While some investors worry that Trainium trails Nvidia GPUs and Google TPUs, Anmuth expects clearer performance disclosures and efforts to widen customer adoption during the event.
Anthropic Expansion Expected To Drive AWS Growth
The analyst also highlights Amazon’s deepening partnership with Anthropic through Project Rainier.
AWS is doubling Anthropic’s access to Trainium 2 chips from about 500,000 to more than one million by year-end.
He believes this expansion will support AWS revenue acceleration in the fourth quarter and throughout 2026, estimating the initiative could generate around $9 billion in annual AWS revenue.
On top of that, Anmuth expects meaningful commentary about the newly announced OpenAI partnership, which includes a $38 billion, seven-year commitment to scale workloads on AWS infrastructure.
OpenAI plans to deploy significant Nvidia GPU capacity through AWS and expand even further in 2027.
The analyst emphasizes that AWS demand remains healthy: third-quarter backlog grew 22% year-over-year to $200 billion, with more booked in October alone than in the entire third quarter.
He forecasts AWS growth to accelerate in 2026, potentially outpacing Microsoft Azure in quarterly revenue gains starting in early 2026.
Investment View And Fourth-Quarter Estimates
Anmuth says clearer visibility into AWS AI roadmaps, Trainium, Antrophic, OpenAI, and power-scaling commitments should reduce investor concerns and support stronger stock performance into year-end and 2026.
The analyst recommends buying Amazon’s post-earnings dip, calling it JPMorgan’s top pick heading into the new year.
Anmuth projected fourth-quarter revenue of $212.67 billion and adjusted EPS of $2.76.
Price Action: Amazon shares are up 0.44% at $230.67 at the time of publication on Wednesday.
Read Next:
Photo by bluestork via Shutterstock
