Investing.com — shares ended the week trading up 3.08% after analysts at Morgan Stanley (NYSE:MS) raised their price target for the e-commerce giant to $300. The upgrade follows a massive expansion of Amazon’s strategic partnership with OpenAI, which includes an incremental $100 billion commitment to Amazon Web Services (AWS).
Investors cheered the reinforced growth outlook for the company’s high-margin cloud division.
The expanded deal adds a year to the existing eight-year term and brings OpenAI’s total commitment to AWS to a staggering $138 billion. Crucially, the partnership involves a major validation of Amazon’s in-house silicon. OpenAI has committed to consuming approximately 2GW of Trainium capacity, spanning both the current Trainium3 and the upcoming Trainium4 chips expected in 2027.
The OpenAI contract suggests that AWS is successfully diversifying its AI hardware offerings beyond Nvidia’s dominance, potentially lowering long-term capital intensity while boosting yields.
AWS growth trajectory and multi-model strategy
Morgan Stanley analysts led by Brian Nowak cited increased confidence in AWS’s durability, subsequently raising their growth forecasts for 2026 and 2027 to 29% and 32%, respectively. The partnership is not merely about infrastructure; it also integrates custom OpenAI models directly into Amazon’s customer-facing applications.
AWS will also serve as the exclusive third-party cloud distribution provider for OpenAI Frontier, a platform designed for building and managing enterprise-grade AI agents.
Amazon.com Inc. has embraced a multi-model approach that positions AWS as a “horizontal” layer for the growing agentic AI economy. The partnership requires the tech giant to invest an additional $50 billion in OpenAI, but the massive “backlog” of cloud commitments is expected to provide a significant tailwind to Amazon’s valuation.
Analysts believe the deal effectively de-risks the AWS growth narrative for the next several years. As the “capacity and yield math” continues to show upside, the firm reiterated its Overweight rating, noting that Amazon remains a top pick in the large-cap internet space.