• BNP Paribas Exane initiates Amazon coverage with Outperform rating and $320 price target
  • Analyst sees Amazon maintaining leadership in cloud computing and e-commerce with digital advertising upside
  • Concerns about AI underinvestment deemed overstated as company expands infrastructure and integration

BNP Paribas Exane analyst Nick Jones has initiated coverage of Amazon.com Inc. with an Outperform rating and named the e-commerce and cloud computing giant a top pick, setting a $320 price target that implies significant upside from current levels.

According to people familiar with the matter, Jones sees Amazon as well-positioned to maintain its dominance in both cloud computing through Amazon Web Services and its core e-commerce business, while also capturing substantial growth in digital advertising. The analyst specifically noted that concerns about Amazon underinvesting in artificial intelligence appear overblown, pointing to the company's ongoing expansion of AI infrastructure and integration of AI models across AWS and its consumer ecosystem.

This bullish initiation comes as Amazon's stock showed some volatility in recent sessions, closing at $226.99 despite strong third-quarter results that saw revenue climb to $180.2 billion, representing 12-13% year-over-year growth. The company's cloud division, AWS, posted $33 billion in revenue for the quarter, accelerating to 20% growth as AI workloads and infrastructure investments gained traction.

"The market may be underestimating Amazon's AI capabilities and the monetization potential across its ecosystem," Jones wrote in the initiation note, according to sources who've seen the report. He emphasized that Amazon's strategic moves—including custom silicon development, AI infrastructure expansion with AgentCore, and broader Bedrock platform integration—position the company for multi-quarter growth into fiscal 2026.

Amazon's recent financial performance has generally exceeded expectations, with net income jumping 38-39% year-over-year to $21.2 billion, bolstered by a $9.5 billion pre-tax gain from the company's investment in AI firm Anthropic. Advertising revenue grew 22% to approximately $17.7 billion, highlighting the segment's increasing contribution to Amazon's diversified revenue streams.

While the company faced some headwinds including a $2.5 billion FTC settlement and $1.8 billion in severance costs affecting reported operating income, management's guidance for the critical fourth quarter remains strong. The company expects revenue between $206 billion and $213 billion with operating income of $21-26 billion, reflecting confidence in holiday season performance and ongoing investment scalability.

Amazon's heightened capital expenditures for fiscal 2025, projected at approximately $125 billion, with even higher levels expected in fiscal 2026, underscore the company's substantial bets on AI and core infrastructure continuing to drive both cloud and retail growth. The BNP Paribas Exane initiation suggests these investments are beginning to bear fruit and may not be fully appreciated by the market.

Representatives for Amazon did not immediately respond to requests for comment on the new coverage. The $320 price target represents approximately 41% upside from recent closing levels, reflecting the analyst's conviction in Amazon's ability to execute across its multiple growth vectors.

Correction: An earlier version of this article misstated the percentage growth in AWS revenue. It was 20% year-over-year, not 25%.