Bank of America raises Amazon stock price target as AWS AI business becomes the company's profit engine

Bank of America adjusted its Amazon stock price target ahead of the company's earnings announcement, signaling confidence in Amazon's shift from retail to cloud computing. AWS (Amazon Web Services), the company's cloud infrastructure division, has become Amazon's most valuable business unit thanks to surging demand for AI computing power from companies building AI applications.

AWS generates higher profit margins than Amazon's retail business—when customers rent computing power to train and run AI models, Amazon keeps more of each dollar than it does selling physical goods. This means Amazon's total profit is now more dependent on how many companies pay for AI compute than on how many people buy items online.

For business professionals and investors: if you own Amazon stock or watch tech valuations, this signals Wall Street believes Amazon's future growth will come from enterprise customers needing AI infrastructure, not from e-commerce growth. For companies considering cloud providers, AWS's central role in Amazon's strategy means expect continued heavy investment in AI-focused features to stay competitive with Microsoft Azure and Google Cloud.