AWS Momentum and Meta’s Chip Deal Propel Amazon to Record High Ahead of Quarterly Report

Amazon shares closed the trading week at a fresh all-time high of $263.99, surging 3.42% on Friday alone as investors piled into the stock ahead of what promises to be a pivotal earnings release on April 29. The rally pushed the year-to-date gain to roughly 17%, fueled by a potent combination of analyst upgrades and a blockbuster customer win for the company’s cloud division.

The catalyst for the late-week surge came from an unexpected corner: Meta has signed a multi-billion-dollar agreement to use Amazon Web Services for its next-generation artificial intelligence workloads, specifically tapping Amazon’s custom Graviton chips. The deal instantly transforms Meta into one of the largest customers for Amazon’s in-house processors, sending a powerful signal about the depth of demand in the cloud market.

Analyst desks wasted little time recalibrating their expectations. Oppenheimer raised its price target to $275 from $260 with an “Outperform” rating, projecting AWS revenue growth of 29% in 2026 — with potential to reach 42% if capital expenditure flows remain linear. BMO’s Brian Pitz pushed his target even higher to $315, citing internal industry checks that point to an acceleration in AWS growth during the first half of 2026. UBS analyst Stephen Ju sees AWS expanding 38% next year, well above the consensus estimate of 26%, and lifted his target to $304. Bank of America and KeyBanc followed suit, raising their targets to $298 and $325 respectively. The average price target across 42 analysts now stands at roughly $285, implying about 11% upside from current levels.

What the Market Expects on April 29

For the first quarter of 2026, Wall Street forecasts revenue of approximately $188 billion, representing year-over-year growth of nearly 14%. Earnings per share are expected to come in at around $1.63, up from $1.59 in the same period last year. AWS remains the centerpiece: the consensus calls for cloud revenue of $36.8 billion in the quarter, with Bank of America projecting annual growth of 28% — three percentage points above the broader market view.

The margin picture has softened slightly. Analysts now expect AWS to post an operating margin of 35.7%, down from an earlier estimate of 37.7%. That compression, while modest, has tempered some of the enthusiasm around the cloud business.

Should investors sell immediately? Or is it worth buying Amazon?

CEO Andy Jassy has already flagged that AI services within AWS are running at an annualized revenue run rate of $15 billion. If the division can sustain growth at or above 20%, the valuation thesis around Amazon’s most profitable segment remains intact. A miss on that front, however, could reignite the debate over the company’s enormous capital spending plans.

The $200 Billion Capex Question

Amazon’s announced investment budget of $200 billion for 2026 — heavily weighted toward AI infrastructure and AWS capacity — triggered a selloff when first disclosed in February. Analysts have warned that such spending could push free cash flow into negative territory in the near term. The company’s own operating income guidance for the first quarter came in at $16.5 billion to $21.5 billion, below the then-consensus of $22.2 billion. That relatively low bar means a solid beat is achievable, but a miss within that range would likely draw a sharp market reaction.

Tariff risks add another layer of uncertainty. Jassy acknowledged in January that rising import costs are already feeding through to some product prices. CFRA, Citi, and Truist have all suggested that Amazon may adopt a cautious tone in its second-quarter outlook. The elimination of the de minimis rule has further increased costs for the third-party marketplace, and the company is actively negotiating with suppliers on price adjustments.

The earnings call on April 29 at 5:30 PM ET will determine whether the record high reflects genuine fundamental strength — or whether the market has set the bar too high for even Amazon to clear.