AWS on Fire: How AI Demand Is Rocketing Amazon (AMZN) Stock to New Heights

Amazon's cloud engine just hit the afterburners. AWS acceleration, turbocharged by an insatiable hunger for artificial intelligence, is reshaping the investment thesis for the retail giant turned tech titan.

The AI Gold Rush Hits the Cloud

Forget just selling books and boxes. The real action is in the data centers. Enterprises are scrambling to build, train, and deploy AI models, and they're writing massive checks to AWS for the computing power to do it. This isn't a trickle of demand—it's a flood, and Amazon's infrastructure is the levy holding it all. Every new AI startup, every corporate transformation project, pours another stream into the AWS revenue river.

Beyond Retail: The New Profit Engine

While headlines chase retail sales, the smart money watches the margins. AWS has long been the profit powerhouse, funding Amazon's wilder ambitions. Now, with AI workloads commanding premium prices, that engine is getting more efficient and more lucrative. It's a classic case of the side hustle outgrowing the main gig—only this side hustle is a multi-billion-dollar cloud empire.

A Balanced Bet on the Future

The outlook isn't just lifted; it's being rewritten. Analysts aren't just tweaking numbers upward; they're reconsidering Amazon's ceiling in a world where data is the new oil and AWS owns one of the biggest refineries. Sure, there's competition, and the tech landscape shifts faster than a crypto meme coin. But the current trajectory points to one thing: sustained growth fueled by a fundamental shift in how the world does business.

Of course, on Wall Street, every silver lining has a cloud—usually followed by five analysts debating its precise shade of grey and issuing a 'hold' rating with a side of existential doubt.

TLDR

• Amazon struck a $38 billion, seven-year cloud deal with OpenAI.
• AWS will supply compute power and Nvidia GPU access for OpenAI workloads.
• Amazon shares trade at $233.22 amid renewed analyst optimism.
• Q3 results showed strong cloud momentum supporting the AI strategy.
• AMZN posted a 148% three-year return, far above the S&P 500.

Amazon.com Inc. (NASDAQ: AMZN) closed at $233.22, rising 1.77% on November 28 as enthusiasm strengthened around its newly announced deal with OpenAI.

Amazon.com, Inc., AMZN

The stock is viewed as a consensus Buy, with analysts projecting nearly 20% upside from current levels.

The recent surge in attention comes after Amazon delivered strong Q3 performance and executed a major strategic partnership that positions the company deeper inside the global AI infrastructure race.

The agreement with OpenAI, valued at $38 billion over seven years, gives AWS a meaningful foothold in providing compute power to one of the leading AI research organizations. The deal comes after years in which OpenAI relied largely on Microsoft Azure, marking a significant shift in competitive dynamics.

AWS Becomes a Key Pillar in OpenAI’s Expansion

According to Bloomberg’s November 3 report, AWS will supply OpenAI with access to vast GPU clusters powered by Nvidia graphics processing units. Matt Garman, CEO of AWS, said the company’s infrastructure will support OpenAI’s rapid model development, noting its ability to handle demanding AI workloads.

Sam Altman, CEO of OpenAI, highlighted that the partnership strengthens the broader compute ecosystem and will help bring advanced AI capabilities to global users. For Amazon, the deal expands AWS’s role in high-performance AI deployments, a segment increasingly central to enterprise technology spending.

Strong Q3 Results Bolster AI Optimism

Amazon’s latest quarterly performance fed the bullish sentiment. Investors reacted positively to the acceleration in AWS revenue, which remains the company’s most profitable division. As competition in AI infrastructure intensifies, AWS’s ability to secure major clients reinforces its strategic relevance.

Amazon’s broad business model supports this momentum. Its operations span e-commerce, advertising, streaming, physical retail, hardware, and cloud services. The synergy between retail data, logistics networks, Prime ecosystem growth, and AWS technology creates a diversified and defensible structure.

Performance Metrics Highlight Long-Term Strength

Trailing returns show Amazon’s resilience despite a modest YTD gain of 6.30%, which lags the broader S&P 500’s 16.45%. The 1-year return of 13.36% remains competitive, but the strongest metrics emerge over longer horizons.

Amazon recorded a 148.24% three-year return, significantly outpacing the S&P 500’s 72.78%. Its five-year return of 45.98% trails the benchmark but reflects recovery from previous macro pressure. The company’s heavy investments in AI, cloud infrastructure, robotics, and logistics automation may support stronger long-term returns.

AI Leadership Potential and Investor Considerations

The OpenAI deal reinforces Amazon’s commitment to scaling advanced computing solutions. It also provides the company with exposure to a leading AI developer that had previously operated outside AWS’s client portfolio. The MOVE could attract more generative AI startups and enterprise customers seeking capacity for large-scale model training.

Despite the optimism, some analysts argue that other AI stocks may offer more asymmetric upside. These alternatives often target specialized workloads or benefit from geopolitical trends like onshoring and tariff-driven manufacturing shifts.

A Strengthened Competitive Position Moving Forward

Amazon’s massive cloud footprint, combined with strategic partnerships such as the OpenAI agreement, supports its ambition to remain a dominant force in the AI era. The stock’s current valuation reflects both cautious sentiment and long-term confidence. If AWS continues to secure high-impact deals, Amazon may extend its leadership in infrastructure-driven AI markets.