Alphabet and Amazon Boost AI Investments, Significant Growth in Cloud Revenue
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 06 2026
0mins
Should l Buy AMZN?
Source: Fool
- Google Cloud Growth: Google Cloud's revenue grew by 20% last quarter, driven by strong demand for AI services, and is expected to continue accelerating through 2026, solidifying its leadership in the cloud computing market.
- AI Chip Advantage: Alphabet's proprietary AI chips lower training and inference costs, providing a competitive edge in developing and running AI models, while also starting to supply these chips to external customers, further expanding its market reach.
- Amazon Cloud Deal: Amazon signed a seven-year, $38 billion deal with OpenAI to provide computing power for AI model development, significantly enhancing AWS's market share and profitability.
- E-commerce and AI Integration: Amazon leverages AI and robotics in its e-commerce operations, with over 1 million robots optimizing its logistics network, reducing costs, and speeding up delivery, thereby driving profit growth.
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Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AMZN is 294.69 USD with a low forecast of 250.00 USD and a high forecast of 340.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
47 Analyst Rating
46 Buy
1 Hold
0 Sell
Strong Buy
Current: 222.690
Low
250.00
Averages
294.69
High
340.00
Current: 222.690
Low
250.00
Averages
294.69
High
340.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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See More
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- Changing Consumer Behavior: CEO Andy Jassy noted that consumers are becoming more price-conscious, seeking bargains, which could lead them to shop at alternative retailers, potentially impacting Amazon's market share.
- Long-term Growth Prospects: Despite the challenges posed by tariffs, Amazon still possesses strong long-term growth potential, with a robust business model and solid cash flow that position it well to navigate economic slowdowns.
- Reasonable Market Valuation: With a market cap of $2.6 trillion, Amazon may seem expensive, but its forward P/E ratio of 29 indicates that the stock is not egregiously overvalued, making it a solid long-term investment choice.
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- Live Rights Negotiation: The NFL is planning discussions with non-traditional media companies about potentially selling live game rights, indicating its sensitivity to changes in the media ecosystem and aiming to broaden its audience base and revenue streams.
- New Strategic Signals: The $100 million deal with YouTube marks a new strategy in NFL's media partnerships, potentially encouraging more non-traditional partners to engage, thereby altering the landscape for traditional media.
- International Game Expansion: The league is set to increase its international slate to a record nine games next season and may sell a separate media package for some of these matchups, further expanding its global reach and attracting international viewers.
- Future Collaboration Opportunities: The NFL recognizes interest from smaller partners and other media players, planning to engage with these potential partners to explore new collaboration models, ensuring competitiveness in an evolving media environment.
See More
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- Strong Sales Growth: Amazon's fourth-quarter net sales rose 14% year-over-year to $213.4 billion, with advertising sales jumping 23% to $21.3 billion, demonstrating robust performance in both e-commerce and advertising, further solidifying its market leadership.
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- Capital Expenditure Concerns: Amazon's forecast of $200 billion in capital expenditures for 2026 significantly exceeds its operating cash flow of $139.5 billion over the past twelve months, raising investor concerns and contributing to a stock price drop of over 5%.
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