Amazon Strikes $38B OpenAI Deal, Wedbush Hikes Target To Street-High

Core Viewpoint - Amazon.com, Inc. has announced a $38 billion multi-year partnership with OpenAI to provide computing infrastructure for AI workloads, leading to a rise in its stock price and an increase in price target by Wedbush analysts [1][5]. Group 1: Partnership Details - The partnership will initially utilize AWS's existing data centers, with plans for Amazon to expand dedicated infrastructure to accommodate future needs [2]. - The entire planned capacity is expected to be operational by the end of 2026, with the partnership designed to grow over the next seven years [3]. Group 2: Financial Implications - Wedbush analysts raised the price target for Amazon stock from $330 to a Street high of $340, indicating a potential 33% upside for Amazon shares [5]. - Amazon's AWS has reached an annual run rate of over $130 billion, with strong year-over-year growth driven by increased demand for AI and core services [4]. Group 3: Market Position and Future Outlook - The partnership with OpenAI is seen as a natural progression following Amazon's recent collaboration with Anthropic, further solidifying its leadership in AI cloud services [3]. - Analysts are optimistic about the demand in the coming quarters, citing backlog growth and a higher capital expenditure guide for 2025 [5].