HSBC Raises Price Target#
HSBC has increased its price target for Amazon.com Inc. from $280 to $310 while keeping a Buy rating on the stock. Currently, Amazon's shares are trading at $263.04, close to its 52-week high of $265.91. The company's price-to-earnings (P/E) ratio stands at 36.72, indicating how much investors are willing to pay for each dollar of earnings.
Growth in Cloud Computing#
The firm attributes this price target increase to robust growth in Amazon's cloud computing division, Amazon Web Services (AWS), and its artificial intelligence (AI) initiatives. AWS's order backlog has surged to $364 billion, excluding a $100 billion agreement with Anthropic and a recent extension of Amazon's deal with OpenAI for ChatGPT access. Notably, the backlog includes $225 million in revenue commitments for Trainium, Amazon's custom silicon program.
Strong Performance Metrics#
Trainium's business has seen nearly 40% growth in the first quarter, now boasting an annual run-rate exceeding $20 billion, up from $10 billion at the end of the previous year. AWS AI revenues have also reached a run rate of over $15 billion, making up nearly 10% of total AWS revenue, with spending on advanced AI models increasing by more than 170% in the first quarter.
Positive Financial Outlook#
HSBC has also raised its estimates for Amazon's operating income and earnings before interest and taxes (EBIT) for the fiscal years 2026-2028 by 7% to 8%. This adjustment reflects a positive outlook for the company's financial health, which is rated as "GREAT" according to InvestingPro analysis. Recently, Amazon reported its first-quarter 2026 earnings, surpassing analyst expectations with an earnings per share (EPS) of $2.78, significantly higher than the projected $1.63, and revenue of $181.5 billion, exceeding the anticipated $177.13 billion.