Citi raised its Amazon (NASDAQ: AMZN) price target from $265 to $285 on Wednesday, March 25, maintaining a “Buy” rating.
Beyond the new price, the bank increased estimates for Amazon Web Services (AWS), citing continued artificial intelligence (AI) demand following revenue contributions from Anthropic, OpenAI, and core workloads.
More precisely, Citi now expects AWS revenue growth of 28% year-over-year in Q1 and 29% in 2026 overall. In 2027, the figure should rise to 37%, as Amazon’s Anthropic and OpenAI partnerships evolve.
While acknowledging concerns around returns on investment, competitive pressure, and limited free cash flow visibility, the analysts said faster monetization, revenue growth, and rising operating income support a constructive outlook.
“…we believe AWS can ramp its infrastructure capacity given demand (we are adjusting our CapEx projections slightly as well). While we acknowledge the concerns around AWS ROI, competition, and limited FCF visibility, given monetization quickly following capacity additions, accelerating revenue growth, and rising OI, we believe AWS is increasingly well positioned,” analyst Ronald Josey wrote.
Amazon Web Services will drive future growth, Citi claims
Furthermore, Citi expects Anthropic to contribute about $18 billion and $31 billion in AWS in 2026 and 2027, respectively. The projections are based on estimates of inference, training, and reseller activity running on AWS infrastructure as Project Rainier scales.
When it comes to OpenAI, the analysts pointed to AWS’s $100 billion, eight-year Trainium partnership and a $38 billion, seven-year GPU agreement with Nvidia (NASDAQ: NVDA). Thanks to these joint moves, Citi estimates OpenAI could generate about $6 billion in AWS revenue in 2026 and roughly $18 billion in 2027.
All in all, the analysis concluded that AI-related demand could make up around 58% of incremental AWS revenue this year and roughly 72% next year. At the same time, AI adoption is increasingly driving new cloud migrations and workloads, which should allow non-AI workloads to sustain growth further.
New Amazon stock price target
As of the time of writing, the average Amazon share price target for the next twelve months is $283.57. The forecast is the result of a total of forty-four analyst takes over the past ninety days, as presented by the market analysis platform TipRanks.
A total of forty-four analysts believe Amazon is a “Buy,” while only three suggest “Holding.” Notably, there have been no “Sell” recommendations over the past three months, which puts Amazon on Wall Street’s “Strong Buy” list.
Featured image via Shutterstock
