Amazon(US:AMZN) Benzinga·2025-12-05 17:46Core Insights - Amazon.com Inc is attracting investor interest as it expands its core businesses and ventures into high-growth markets, with Goldman Sachs analyst Eric Sheridan maintaining a Buy rating and a price target of $290 [1][5] AWS Growth Strategy - Amazon Web Services (AWS) aims to grow by leveraging its cloud foundation while aggressively entering the AI sector, balancing its legacy strengths with future AI-driven computing [2][6] - AWS is focusing on three main themes: developing custom chips to reduce computing costs while partnering with Nvidia for AI capabilities, transforming enterprise operations through AI agents, and rapidly scaling its Bedrock platform, which now has over 100,000 customers, doubling from the previous year [3][4] Long-Term Growth and Margin Outlook - AWS is positioned to achieve over 20% compounded revenue growth in the coming years, with GAAP EBIT margins expected in the low-to-mid 30% range despite heavy investments in AI infrastructure [8] - The broader Amazon businesses, including e-commerce and digital advertising, are also showing positive trends as they head into the next quarter [8] AI Strategy and Innovations - At the re: Invent conference, Amazon reinforced its three-layer AI strategy encompassing infrastructure, models, and applications, introducing the Graviton 5 custom chip and new AI Factories for dedicated AI infrastructure [9][10] - New autonomous agents and the Nova Act service for automating complex workflows were also launched, enhancing Amazon's AI capabilities [10] Market Position and Competitive Landscape - Although AWS has experienced some loss in cloud market share, this is attributed to its larger revenue base and competition from Azure, with strong backlog growth and significant new commitments driven by AI demand [11] - Projections estimate AWS AI services could generate approximately $10.7 billion in revenue in 2025 and $23.1 billion in 2026, contributing positively to AWS's overall growth [11]