Amazon (NASDAQ: AMZN) shares rose 1% to $242.79 in Monday’s premarket trading as Phillip Securities upgraded the stock from Accumulate to Buy and increased its price target from $320 to $330 following the company’s third-quarter earnings.
Analyst Helena Wang cited accelerating growth at Amazon Web Services (AWS), where third-quarter revenue increased 39.3% year-over-year to approximately $46 billion. The cloud business recorded its sixth consecutive quarter of accelerating growth, its fastest expansion in nearly five years.
AWS backlog also surged 189% year-over-year to $578 billion, representing contracted cloud services that have yet to be recognized as revenue.
Phillip Securities increased its 2027 revenue forecast by 2% and its adjusted net profit attributable to shareholders estimate by 3%. The brokerage also raised its 2027 capital expenditure forecast by 3%, reflecting expectations for continued cloud infrastructure investment.
Amazon Shares Attempt Rebound After Two-Day Decline
Amazon shares had fallen about 5.6% over the previous two sessions, from $254.60 to $240.35, before Monday’s premarket recovery.
Friday’s post-earnings decline came amid investor concerns over heavy AI infrastructure spending, deteriorating free cash flow, and a fourth-quarter revenue forecast whose midpoint fell slightly below Wall Street expectations.
Despite the early gain, the stock remained about 4.6% below its pre-selloff closing level. Trading volume in the latest regular session reached 105 million shares, up 23% from the 85.2 million shares traded on Thursday, October 29, before the earnings release.
Separately, Amazon Tokenized bStocks (AMZNB) traded at $242.39, up 0.53% over 24 hours, according to CoinMarketCap. The tokenized instrument trades independently of Amazon’s Nasdaq-listed shares.
AI Demand Supports Investment Despite Cash Flow Pressure
Phillip Securities said Amazon’s ability to support multiple AI models, combined with its custom Graviton and Trainium chips and partnerships with major AI developers, strengthens its competitive position.
Amazon reported third-quarter operating income of $28.1 billion and a record operating margin of 13.9%. However, its trailing 12-month free cash flow fell to a $42.4 billion outflow, compared with a $14.8 billion inflow a year earlier, largely reflecting increased infrastructure investment.
The company maintained its 2026 cash capital expenditure outlook of approximately $220 billion and expects spending to rise meaningfully in 2027.
Phillip Securities said strong visibility into future AI and cloud demand supports Amazon’s continued infrastructure spending despite the pressure on free cash flow.