Analysts Say AWS Will Drive ‘Significant Upside’ for Amazon. Should You Buy AMZN Stock Now?

Core Viewpoint - Amazon's stock has shown consolidation in 2025, and with ongoing earnings surprises, it may be an opportune time for accumulation [1] Financial Performance - For Q3 2025, Amazon reported a year-on-year revenue growth of 13% to $180.2 billion, with AWS contributing significantly by achieving a 20% year-on-year revenue growth to $33 billion [4] - North America and international markets generated $147.2 billion in sales, with an operating income of $6 billion, resulting in a 4.1% operating income margin [5] - AWS reported revenue of $33 billion and an operating income of $11.4 billion, leading to a robust operating income margin of 34.5% [5] Growth Drivers - Oppenheimer raised its price target for Amazon stock from $290 to $305, citing AWS's potential to double its capacity by 2027, which could yield $3 billion in revenue per incremental gigawatt [2] - AWS has added over 3.8 gigawatts in capacity in the last year, with plans for further expansion, indicating sustained growth and company-wide operating margin improvement [6] Investment and Cash Flow - Amazon has reported operating cash flows of $130 billion over the last 12 months and holds a cash buffer of $94.2 billion as of Q3 2025, alleviating concerns regarding financing large investments [7] - The company announced a $50 billion investment to enhance AI and supercomputing capabilities for AWS U.S. government customers, expected to drive growth acceleration in the next 24 to 36 months [6]