He also praised the opportunity that AI offers to Amazon Web Services (AWS), saying he expects the technology to generate “tens of billions of dollars in revenue in the coming years.”
Wall Street applauded the positive commentary for the business that accounts for nearly all of Amazon’s profits but had slowed after the pandemic as customers cut costs.
“Technology investors can breathe a sigh of relief,” Bernstein analysts said in a note to clients, adding that “AWS growth looks poised to accelerate again even without AI.”
About 26 brokerages raised their price targets on the stock, pushing their median estimate to $173, according to LSEG data.
Amazon shares have risen about 40% this year, but have lost almost 8% in the past two days after Alphabet warned that cloud customers were holding back spending.
In the July-September period, Amazon reported its first quarter-over-quarter increase in cloud growth in nearly two years.
“Amazon Web Services optimization has stabilized, although growth fell slightly short of our expectations,” said Morningstar analyst Dan Romanoff.