Amazon Stock Pressured Lower; Analysts Still Bullish on AWS AI Growth Prospects

Amazon shares fell nearly 2% on Thursday, underperforming the broader market and its sector despite analysts' bullish views on Amazon Web Services and AI-driven cloud demand.

• Amazon shares are facing downward pressure. Why is AMZN stock pulling back?

Rosenblatt Sees AWS Growth Exceeding Expectations

Rosenblatt analyst Scott Devitt initiated coverage on Amazon with a Buy rating and a $335 price target, arguing that investors are underestimating the company's AI opportunity.

Devitt expects AWS growth to reach 45% by the end of 2026, above Wall Street's expectation of 38%. He also projects AWS annual revenue to exceed $335 billion by 2028.

Citizens Says AI Demand Supports Cloud Growth

Citizens analyst Andrew Boone reiterated a Market Outperform rating and a $315 price target, citing strong growth from OpenAI and Anthropic as positive indicators for AWS.

Boone expects growth in AI usage to support cloud infrastructure demand and believes hyperscalers are unlikely to face severe server capacity oversupply.

Despite the Nasdaq rising 1.01% and the S&P 500 gaining 0.59%, Amazon shares remained under pressure. The consumer discretionary sector fell 0.7%, yet Amazon still underperformed that sector.

Major ETF Holdings

Franklin Focused Dynamic Growth ETF: Weight 9.86%

Direxion Daily Magnificent 7 Bull 2X ETF: Weight 9.80%

Argent Large Cap ETF: Weight 9.20%

Importance: Given Amazon's high weightings in these funds, any significant inflows or outflows in these ETFs could trigger automatic buying or selling of the stock.

AMZN Price Action

AMZN stock dynamics: As of Thursday's writing, Amazon shares were down 1.58% at $256.18.