Key Takeaways
- KeyBanc upgraded Amazon’s price target from $285 to $325, suggesting a possible 30% upside from Monday’s trading levels.
- Anthropic’s annualized revenue climbed dramatically from $9B in late 2025 to $30B by early April 2026, creating tailwinds for AWS.
- AWS is believed to capture approximately 60% of Anthropic’s infrastructure expenditure, according to KeyBanc analysis.
- CEO Andy Jassy signaled potential third-party sales of Trainium chips, which have already generated over $20B in AWS revenue.
- Shares declined 1.4% to $247.18 on Monday, hovering just 1.4% beneath the November 2025 record close.
Amazon is drawing fresh attention from analysts ahead of its April 29 quarterly report, fueled predominantly by Anthropic’s remarkable expansion and the persistent momentum within AWS.
KeyBanc’s Justin Patterson elevated his Amazon valuation to $325 from $285 over the weekend. This represents approximately 30% upside compared to Monday’s opening price.
Patterson simultaneously increased his revenue projections, raising 2026 expectations by 1% and 2027 forecasts by 2%.
Amazon stock retreated 1.4% Monday, closing at $247.18 amid broader market anxiety surrounding escalating U.S.-Iran geopolitical tensions. Friday’s close of $250.56 sat merely 1.4% beneath the stock’s November 2025 record high.
The pre-earnings landscape appears increasingly favorable.
Anthropic has emerged as a pivotal player in AWS’s growth narrative. The AI company’s annualized recurring revenue skyrocketed from $9 billion in December 2025 to $30 billion by early April 2026—a trajectory that demands attention.
According to KeyBanc’s analysis, AWS captures roughly 60% of Anthropic’s infrastructure investment. This represents substantial revenue linked to one of the AI sector’s fastest-expanding companies.
Anthropic has maintained aggressive product development. The company launched Claude Opus 4.7 this month—its most sophisticated reasoning model to date. Additionally, it introduced Claude Mythos, a highly agentic model that Anthropic has restricted from public release citing national security considerations.
Cloud Division Acceleration Expected
Patterson highlighted a “combination of capacity gains, AI diffusion, and client expansion” as key AWS drivers for the first quarter. He projects 30% year-over-year AWS growth—marking acceleration from 2025, when the cloud division generated $128.7 billion in annual revenue, representing 20% growth versus the previous year.
Robust earnings last week from Taiwan Semiconductor (TSM) reinforced optimism that AI infrastructure demand continues thriving entering earnings season.
Wedbush’s Dan Ives reinforced this perspective. “We are seeing no cracks in AI demand on the chips/hardware or software front,” he noted, characterizing it as a “bright green light” for owning leading technology stocks.
Chip Business and Satellite Ventures Gain Traction
Amazon’s Trainium semiconductor division has already exceeded $20 billion in AWS-driven revenue, posting triple-digit year-over-year growth rates. In his annual shareholder communication, Jassy suggested openness to distributing Trainium chips to external buyers—potentially unlocking another growth avenue.
Regarding consumer operations, KeyBanc highlighted robust grocery segment performance and the forthcoming Amazon Leo satellite internet service launch. Amazon recently finalized Globalstar’s acquisition, securing additional spectrum to facilitate Leo’s deployment.
Patterson identified one concern: the continuing Iran conflict has disrupted Strait of Hormuz shipping routes and elevated fuel expenses. He anticipates this will impact Amazon’s second-quarter outlook. The company’s recently implemented 3.5% fuel surcharge on third-party merchants, introduced earlier this month, may partially mitigate this headwind.
Amazon will publish first-quarter financial results on April 29.
