Amazon (AMZN) Stock: Barclays Attributes Outperformance to AWS and AI Growth

TLDR

• Barclays indicates Amazon is set to outperform other large-cap tech stocks, fueled by AWS expansion.
• AWS has achieved a $15 billion annualized revenue run rate specifically for AI services.
• Amazon’s custom chip division now boasts a $20 billion revenue run rate, having doubled in just three months.
• AMZN currently trades at a forward price-to-earnings ratio of 32, which is historically low and below the valuations of Walmart and Costco.
• AWS revenue rose 24% year-over-year in the last quarter—its quickest growth rate in more than three years.

(SeaPRwire) –   Amazon is garnering new interest from Wall Street. Analysts at Barclays predict AMZN will likely outperform the other members of the Magnificent 7 in the coming months, citing accelerating growth at AWS and a subtly strong chip business.

Amazon.com, Inc. (AMZN)

In a client note, the UK-based bank stated that recent metrics have given it “confidence in AWS’s AI-driven upside over the next few years.” Barclays described Amazon as “one of the more hotly debated stocks” in its coverage, yet noted that a clear bullish case is taking shape.

This bullish thesis recently received a tangible data point. Amazon revealed that AWS has hit a $15 billion annualized revenue run rate for AI services exclusively. Additionally, the company intends to add over one million Nvidia processors between now and 2027.

Barclays projects that once fully implemented, these processors could generate $100 billion in annual AWS revenue. This significant figure is one reason analysts are becoming more optimistic about the stock.

The Chip Story Nobody Is Talking About

Amazon’s custom chip operation is growing rapidly—yet under the radar. It now has an external revenue run rate of $20 billion, having doubled in only three months. When internal usage is included, Amazon reports the business is closer to $50 billion.

In addition to its Trainium AI chips, Amazon is also working on its own CPUs. As agentic AI gains traction, CPUs are emerging as a new bottleneck, and Amazon is positioning itself to stay ahead of this trend.

AWS revenue increased 24% year-over-year in the previous quarter—its fastest growth rate in over three years. Amazon constructed a large facility for AI partner Anthropic that launched in Q4, further boosting cloud demand.

Valuation Numbers That Stand Out

AMZN’s forward P/E ratio currently stands at 32. While this is significantly higher than last year’s low of 24, it remains historically inexpensive for the company. Amazon’s trailing P/E has been on a downward trend for most of the past 10 years.

Even more notable is that Amazon now trades at a lower valuation than Walmart and Costco in the retail sector—despite its retail revenue and profits growing faster than both competitors.

North American operating margin reached 9% in Q4, up from 8% the previous year. This improvement led to a 24% rise in North American operating income, even as sales only increased by 10%.

Robotics and AI are enhancing the efficiency of Amazon’s e-commerce operations. Robust growth in its high-margin sponsored ads segment is also contributing to higher margins.

Amazon’s grocery division exceeded $150 billion in U.S. gross sales in 2025, solidifying its position as the nation’s second-largest grocer, trailing only Walmart.

AMZN stock holds a consensus Strong Buy rating from 46 Wall Street analysts—43 Buy ratings and three Hold ratings. The average price target of $284.09 suggests an approximate 15% upside from its current trading price.

AMZN is currently trading at $254.29, a 1.84% gain for the day, and is close to its 52-week high of $258.60.