Amazon shares climbed as much as 3.7% on Monday, rebounding from two consecutive down sessions as investors responded to fresh analyst backing for the company's cloud unit and a revised view on the technology sector's massive artificial intelligence spending cycle.
The advance came alongside broad gains across major US indexes, with the Nasdaq, S&P 500 and Dow Jones Industrial Average all trading higher as market participants looked past the prior week's technology-driven selloff.
JPMorgan adds Amazon to focus list
JPMorgan analyst Doug Anmuth pointed to accelerating momentum at Amazon Web Services, which posted third-quarter revenue growth of 39.3% year over year — its fastest expansion in nearly five years. The cloud division closed the quarter with a contracted backlog of $578 billion, a figure growing at a triple-digit annual rate and one that offers substantial visibility into future demand as enterprises build out AI infrastructure.
The bank's decision to place Amazon on its Analyst Focus List was interpreted by market participants as a signal to buy, helping lift the stock on the day.
Ives moves capex peak forecast to 2027
Sentiment received a further boost from Dan Ives of Yorkville Ives & Co., who revised his outlook for capital expenditure across Big Tech. The enormous sums spent by technology giants have been a persistent concern for investors worried about returns on AI-related investment.
Ives now expects the growth rate of capital expenditure among major technology companies to peak in 2027, pulling forward his earlier forecast of 2028 or 2029. Crucially, he does not anticipate spending itself declining immediately. Big Tech and hyperscalers could still commit more than $1 trillion to capital expenditure in 2027 even as the pace of growth moderates.
He projects free cash flow at Amazon, Microsoft, Alphabet and Meta will trough in the first half of 2027 before improving in the second half, with a more substantial recovery in 2028 that could set up a major cash flow expansion in 2029 and 2030. Ives also estimates that roughly 10% to 15% of planned US data center capacity could be delayed or abandoned due to power and infrastructure constraints, though he views companies that already control computing capacity as better positioned. He maintains an Outperform rating and a $300 price target on Amazon.
Alexa Shopping expands with text-based AI
Beyond the cloud, Amazon is extending its AI ambitions into retail. The company began rolling out a text-based version of Alexa for Shopping to select US customers on November 6, enabling users to search for products, build shopping carts, place orders and track deliveries through text messages.
Customers can also send photographs of recipes or products and ask Alexa to locate the relevant items. The assistant can remember shopping preferences and help reorder frequently purchased essentials. Amazon said more than 400 million customers had used Alexa for Shopping over the previous 12 months, underscoring the scale of its consumer AI push. The text-based service is expected to reach more US customers in the coming weeks.
This article is for informational purposes only and does not constitute financial advice.
