Amazon Cloud Progress Evident on Multiple Fronts, AWS Growth Accelerates, BofA Says
Amazon.com (AMZN) is showing improving momentum in its cloud business across multiple fronts, driven by gains in capacity, proprietary chips and rising AI-related demand, with growth in Amazon Web Services accelerating, BofA Securities said in a Thursday note.AWS revenue growth accelerated to 28% year over year in Q1, driven by strong demand for AI workloads and core services, alongside rising backlog and early large AI contract wins. The backlog increased by about $120 million quarter over quarter, including roughly $100 million from Anthropic expected in Q2, while Trainium chip commitments exceeded $225 billion.BofA increased its Q2 revenue forecast to about $198 billion from roughly $189 billion, citing AWS strength and a Prime Day timing benefit. The firm also raised its operating profit estimate to about $23.9 billion from $22.9 billion previously.The investment firm also raised its longer-term outlook. It lifted its 2026 revenue and operating profit projections on stronger cloud momentum and improved retail performance. It raised its 2027 estimates to about $949 billion in revenue, $130 billion in operating profit and $9.92 in earnings per share.BofA reiterated its buy rating on the stock and raised its price objective to $310 from $298.Shares of Amazon were down 1.3% in Thursday trading.Price: $259.65, Change: $-3.39, Percent Change: -1.29%