BMO Capital Markets has reaffirmed its Outperform rating on Amazon.com (AMZN) with a price target of US$380, a level that aligns with the bullish sentiment on Wall Street, where the consensus rating is a Strong Buy and price targets range from US$230 to US$405.
The firm said Amazon's fiscal 2026 second-quarter AWS results have eased market concerns about AI demand, with investor attention now shifting to the sustainability of growth and the return on capital spending for infrastructure.
Based on channel checks across the industry, BMO believes AWS near-term growth could exceed the consensus estimate, though compute capacity constraints remain a limiting factor.
BMO noted that momentum in the advertising business continues and that the U.S. consumer market remains resilient. However, due to changes in the timing of the Prime Day calendar, the firm's forecast for Amazon's third-quarter 2026 retail revenue is below the consensus estimate.
While continuing to monitor the macroeconomic environment, BMO kept its third-quarter 2026 and full-year forecasts for the AWS, retail and advertising segments unchanged.
Alongside reiterating its rating and price target, BMO named Amazon a top pick. Amazon is scheduled to report earnings on October 29.
In other market news, Amazon unveiled plans to invest more than 16 billion euros in Germany through 2027 to expand its cloud computing, artificial intelligence, satellite internet and media businesses in Europe.
Separately, Amazon launched a new tool that allows its in-house AI chips to run code written in PyTorch without modification, posing a competitive challenge to Nvidia in the AI compute market.
In addition, KeyBanc maintained its Overweight rating on Amazon, citing a strong AWS revenue growth outlook driven by AI technology, while Morgan Stanley also added Amazon to its "top pick" list, reflecting broadly optimistic sentiment among analysts.
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