Amazon Strikes $38B OpenAI Deal, Wedbush Hikes Target To Street-High

Amazon.com, Inc. (AMZN) shares climbed following the announcement of a $38 billion multi-year partnership with OpenAI, under which AWS will provide computing infrastructure for OpenAI's AI workloads, with full capacity operational by late 2026. Wedbush analysts subsequently raised their price target on AMZN to a Street-high of $340, implying 33% upside, citing the deal as a significant reinforcement of Amazon's AI cloud leadership and reflecting robust demand for AWS, which is already at a $130 billion annual run rate and is poised to double its capacity by 2027.

Analysis

Amazon.com, Inc. (AMZN) shares climbed 4% following the announcement of a $38 billion multi-year partnership where AWS will provide computing infrastructure for OpenAI's artificial intelligence workloads. This significant agreement underscores AWS's critical role in supporting leading AI development, with full operational capacity expected by late 2026 and the partnership designed for seven years of growth.

This collaboration, coupled with Amazon's recent partnership with Anthropic, strategically reinforces AWS's position as a dominant leader in AI cloud services. Wedbush analysts, citing this momentum, raised their price target on AMZN to a Street-high of $340, implying a substantial 33% upside from current levels.

AWS currently boasts an annual run rate exceeding $130 billion, experiencing robust year-over-year growth driven by increasing AI and core service demand. The company plans to double AWS's capacity by 2027, reflecting strong demand and a positive outlook for continued segment momentum, as noted by Wedbush's encouragement regarding backlog growth and higher 2025 capex guidance.

Key Decisions for Investors

• Investors should consider Amazon's reinforced leadership in the high-growth AI cloud infrastructure market, driven by significant partnerships like the $38 billion OpenAI deal and the Anthropic collaboration.
• Monitor AWS's continued capacity expansion plans and backlog growth, as these are key indicators for sustained revenue acceleration and operational leverage through 2027.
• Evaluate the implications of Wedbush's Street-high $340 price target, which suggests considerable upside potential, and assess if current market valuations fully reflect Amazon's strengthening AI-driven growth trajectory.