Amazon’s Cloud Ambitions Fuel Analyst Optimism

Market analysts are expressing renewed confidence in Amazon's prospects following a series of significant announcements at its recent AWS re:Invent 2025 conference. The focus is squarely on whether the company's strategic push into custom artificial intelligence chips can reduce its reliance on industry giant Nvidia while simultaneously capturing greater market share.

The product reveals in Las Vegas prompted two major investment banks to reaffirm their positive outlook. TD Cowen maintained its "Buy" rating with a price target of $300 per share, suggesting an upside potential of approximately 30 percent from current levels. The firm's researchers project AWS revenue will reach $128.1 billion in 2025. Similarly, Goldman Sachs holds a constructive view, issuing a $290 price target. Analyst Eric Sheridan noted that the latest announcements have effectively addressed prior market concerns regarding Amazon's competitive standing in the generative AI sector.

A Strategic Pivot to Proprietary Silicon

Central to Amazon's plan is its growing portfolio of in-house designed processors. The newly unveiled Trainium3 UltraServer promises a substantial leap in capability, offering 4.4 times the computational performance of its predecessor. Crucially, Amazon states this power comes with the potential to slash training costs for large AI models by up to 50 percent.

The conference also served as a launchpad for other key initiatives:
* The introduction of new foundation models under the Nova family.
* AgentCore, a dedicated platform for building autonomous AI agents capable of executing complex tasks independently.

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Looking further ahead, TD Cowen anticipates AWS could sustain an annual growth rate near 22 percent through 2030. Maintaining this pace would position the cloud division to generate close to $350 billion in revenue by the end of the decade. The margin advantages gained from using custom chips are seen as a critical differentiator, especially as rivals like Microsoft's Azure continue to depend heavily on external GPU suppliers.

European Regulatory Hurdles Present a Contrast

While the technological news is positive, Amazon faces concurrent challenges in Europe. Italian authorities have initiated probes into the company's tax and labor practices, with particular scrutiny on its dealings with non-EU merchants and operations within its logistics centers. These investigations reflect a broader regulatory trend across the European continent, where large digital platforms are encountering increased oversight.

The coming quarters will be pivotal in determining if Amazon can successfully translate these technological advances into tangible profit growth. Upcoming earnings reports are expected to provide the first concrete evidence of market demand for the newly announced AWS services.