Rosenblatt initiates Amazon stock coverage with buy rating on AI growth

Rosenblatt Securities has begun covering Amazon.com Inc. (NASDAQ:AMZN) with a buy rating and a $335.00 price target, according to a Tuesday update. This decision reflects the firm's optimism surrounding Amazon's AI growth, as 23 analysts have recently increased their earnings estimates. Amazon currently appears undervalued, with a Fair Value assessment indicating a favorable PEG ratio of 0.24. Analyst Barton Crockett will spearhead Amazon's coverage as part of a larger launch into the eCommerce sector.

Rosenblatt believes Amazon Web Services (AWS) will achieve 45% growth by 2026, exceeding the Street's 38% estimate. AWS already experienced a 37% year-over-year increase in the second quarter, marking its fifth consecutive quarter of growth acceleration. The firm projects AWS to reach $335 billion or more by 2028. Rosenblatt also notes that rising AI spending by customers is driving core AWS usage to compound these gains.

The firm considers Amazon's leadership position in AI as underappreciated, viewing the company as one of the most resilient leaders among its coverage. Amazon's ownership of compute infrastructure combined with its physical fulfillment advantage gives it a competitive edge. For investors seeking more detailed analysis, Amazon is among the 1,400+ US equities covered by InvestingPro's Pro Research Reports.

Amazon recently announced plans to invest $18 billion in northwest Louisiana, expanding its data center capacity with a third campus in Shreveport. This multi-billion-dollar investment is expected to create up to 750 full-time jobs and generate 2,500 additional positions in the community. Meanwhile, Morgan Stanley analysts have forecast significant capital expenditure growth for major tech companies like Amazon, anticipating a 57% increase by 2027.

Citizens has maintained a Market Outperform rating for Amazon, setting a price target of $315 based on projected 2027 earnings. In India, Jefferies has observed Amazon Now leveraging discounting tactics in the competitive quick commerce market of Bangalore. Bank of America reported a slowdown in online spending growth to 8% year-over-year in July, down from the previous month's 16% growth.