TD Cowen, KeyBanc, and Truist Securities all predict Amazon's stock price to be $350 per share in 2027, which is about 43% higher than the price of $245.46 on September 29th. Currently, the average target price for Amazon's stock is even lower, at around $329, while JPMorgan Chase has set a higher target of $365. The question is, can the stock price really rise that much? The article states that the bullish outlook for Amazon's stock in 2027 is based on several factors: AWS growth, $496 billion in backlogged orders, and AI chip orders that are already at full capacity. These factors combined have led to the most optimistic stock price predictions for Amazon in 2027.

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Amazon stock price target, AWS growth, and the upside potential for AI in 2027

After Amazon's second-quarter revenue and operating profit exceeded expectations by 2% and 11% respectively, TD Cowen raised its target price for the stock from $340 to $350. KeyBanc and Truist also subsequently set a target price of $350, so currently there are three major institutions that are uniformly bullish on Amazon's stock price in 2027.

AI Chips and cloud services support a scenario of $350

AWS grew by 36.7% in the second quarter, and Amazon's chip and AI business have also surpassed an annual revenue scale of 25 billion US dollars.

Amazon CEO Andy Jassy stated during the second-quarter conference call:

Revenue increased by 36.7% year-on-year, accelerating for the fifth consecutive quarter. This is the fastest growth in 18 quarters. At that time, AWS's revenue was less than half of what it is now. We added over $4.6 billion in revenue quarter-on-quarter, which is approximately 80% of our historical maximum growth rate. Our backlog of orders has reached $496 billion, with a year-on-year growth rate in triple digits.

This week, AWS will also add Sol, Luna, and Anthropic's Claude Opus to Bedrock. Anthropic and OpenAI have also signed multi-gigawatt-level Trainium agreements, which is an important part of Amazon's valuation logic for 2027. Advertising revenue also increased by 26%, reaching $19.8 billion, adding another growth engine to Amazon's story for 2027 beyond its cloud business.

What could possibly slow down the upward trend before 2027?

To reach a stock price of $350, based on expected earnings, the forward P/E ratio would need to be around 33 times. Wall Street's models for Amazon in 2027 estimate earnings per share to be between $10.47 and $15.04. The current biggest risk is expenditure, as free cash flow has turned into outflows of $7.6 billion over the past 12 months. Price competition among model providers also brings pressure, as cheaper models may lead to more AI calls, but each call may also generate lower revenue.

Jia Xi stated:

"We now estimate that cash capital expenditures in 2026 will be around $220 billion. Due to the increase in memory costs, this figure is higher than our previous estimate of around $200 billion. Even so, we still do not have sufficient production capacity to meet all the demand in 2026, and I believe the same will be true in 2027 as well. In fact, the demand we are already seeing for 2028 is quite astonishing as well."

Under these expenditures, can the stock price of AMZN continue to rise? Jia Xi expects that free cash flow will remain under pressure until the new data center is launched and begins to generate revenue.

So, can the stock price of AMZN rise to $350? As of now, it still needs to increase by 43%. Only if the growth of AWS remains strong will this combination be viable; the next few reports on AWS may show whether Amazon's stock price forecast for 2027 is closer to the average target of $329 or the bullish target of $350.