Amazon shares rise as analysts raise price targets for rising AI growth

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Several analysts raised their price targets for Amazon after the company’s third-quarter results beat Street expectations.
CEO Andy Jassy said the company’s artificial intelligence (AI) business is growing three times faster than Amazon Web Services (AWS) at a similar stage of development.
Amazon expects to increase its capital spending this year, most of which will go towards technology infrastructure to support AI.

Amazon (AMZN) shares rose on Friday as several analysts raised their price targets for the e-commerce giant third quarter results which exceeded expectations.

Wedbush raises its price target to $250 from $225, indicating Amazon’s upside artificial intelligence (AI) business. On the company’s earnings call, Chief Executive Officer (CEO) Andy Jassy said Amazon’s AI business is growing three times faster than Amazon Web Services (AWS), its cloud computing division, did at the same stage of its development.

Cloud revenue grew 19% year-over-year to more than $27 billion amid rising demand for AI. On the investment front, Amazon said it expects to spend $75 billion in capital expenditures this year, most of which will go toward technology infrastructure to support AI demand, according to an earnings call transcript provided by AlphaSense.

JPMorgan analysts are “comfortable” with Amazon’s spending

JPMorgan analysts are “comfortable” with the spending increase given Amazon’s “very clear path to AI monetization through AWS,” the firm said, raising its price target to $250 from $230.

Amazon shares rose 7 percent to $199.68 in late Friday trading and are up more than 31 percent year to date.