{"id":357493,"date":"2026-03-25T15:45:28","date_gmt":"2026-03-25T15:45:28","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/357493\/"},"modified":"2026-03-25T15:45:28","modified_gmt":"2026-03-25T15:45:28","slug":"amazons-openai-deal-will-drive-ai-revenue-growth-stock-upside-citi-says","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/357493\/","title":{"rendered":"Amazon&#8217;s OpenAI deal will drive AI revenue growth, stock upside, Citi says"},"content":{"rendered":"<p>Amazon has room to run as it ramps up its compute capacity and deepens its ties with OpenAI, even as investors fret over eye-watering artificial intelligence investments, according to Citi Research. The bank raised its price target on Amazon to $285 per share from $265, implying about 27% upside from Tuesday&#8217;s close. It also reiterated its buy rating for the stock. &#8220;We are raising our AWS projections given continued AI demand and our analysis of revenue contributions from Anthropic, OpenAI, and core (non-AI) workloads,&#8221; analyst Ronald Josey said Wednesday in a note to clients. In late February, Amazon unveiled a strategic partnership with OpenAI that included a pledge to invest up to $50 billion in AI, deepening the connection between the Silicon Valley power player and the owner of ChatGPT. The deal makes\u00a0Amazon Web Services the exclusive third-party cloud distributor for OpenAI Frontier, an enterprise platform for building, deploying and managing AI agents. The agreement marks one of several multibillion-dollar deals struck over the past few months, as Meta , Oracle , Google , Microsoft , OpenAI and other big names double down on commitments to invest in AI infrastructure. Citi expects AWS revenue growth will rise 28% year-over-year in the first quarter of 2026, and grow 29% in 2026, before accelerating to 37% year-over-year growth in 2027 due to the Anthropic and OpenAi ramp up. AI revenue will likely account for roughly 58% of AWS&#8217; estimated incremental revenue in 2026, and could make up 72% of expected revenue in 2027, according to Citi. &#8220;We believe AWS can ramp its infrastructure capacity given demand,&#8221; Josey wrote. &#8220;While we acknowledge the concerns around AWS [return on investment], competition, and limited [free cash flow] visibility, given monetization quickly following capacity additions, accelerating revenue growth, and rising [operating income], we believe AWS is increasingly well positioned.&#8221; AWS is on track to double its compute capacity by 2027, potentially reaching about 24 gigawatts of compute, the analyst said. Citi&#8217;s call falls largely in line with consensus on the Street. Of the 69 analysts covering Amazon, 65 have a buy or strong buy on shares.\u00a0Howver, its price target is lower than the consensus target. Amazon shares have declined 10% since the beginning of the year as investors&#8217; concerns over the size of investments in AI infrastructure buildouts continue to swirl.<\/p>\n","protected":false},"excerpt":{"rendered":"Amazon has room to run as it ramps up its compute capacity and deepens its ties with OpenAI,&hellip;\n","protected":false},"author":2,"featured_media":357494,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[345,1684,356,343,344,357,85,942,46,10809,355,936,1760,125],"class_list":["post-357493","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-alphabet-class-a","tag-amazon-com-inc","tag-artificial-intelligence","tag-artificialintelligence","tag-business-news","tag-il","tag-investment-strategy","tag-israel","tag-meta-platforms-inc","tag-microsoft-corp","tag-oracle-corp","tag-stock-markets","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/357493","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=357493"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/357493\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/357494"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=357493"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=357493"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=357493"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}