Analyst Boosts AWS Outlook Amid Strong Cloud Demand

Amazon Web Services (AWS) is experiencing a significant surge in growth driven by the increasing demand for artificial intelligence (AI) infrastructure. Financial analysts have revised their revenue estimates upward as the cloud unit expands its capacity to support the complex workloads required for AI training and processing.

On March 25, 2026, Citi raised its price target for Amazon.com from $265 to $285 while maintaining a Buy rating. This adjustment follows an increase in AWS revenue estimates based on strategic agreements with major AI players, including Nvidia, Anthropic and OpenAI.

AI-Driven Revenue Projections

Current projections indicate that AWS sales will grow by 28% year over year in the first quarter of 2026. For the full year of 2026, growth is expected to reach 29%, with a further increase to 37% in 2027.

AI-related workloads are becoming a primary driver of this expansion. Analysts estimate that these workloads will account for approximately 58% of new AWS revenue in 2026 and 72% in 2027.

Specific partnerships are contributing heavily to these figures. Anthropic is projected to generate approximately $18 billion in AWS revenue in 2026 and $31 billion in 2027. OpenAI is expected to add $6 billion in 2026 and $18 billion in 2027.

Infrastructure and Strategic Capacity

The growth is supported by multibillion-dollar contracts focused on AI processing power and training. These long-term infrastructure agreements reflect a broader industry trend where firms utilize cloud infrastructure to scale their AI models.

This trajectory has influenced credit ratings and market sentiment. On February 20, 2026, Moody’s shifted Amazon’s outlook to stable, noting that AWS is expected to grow rapidly due to AI development and cloud adoption, which has led to a significant increase in investment spending to meet demand.

The ability of AWS to effectively expand its capacity and monetize these AI services remains a critical factor for investors. The company is positioned to benefit from both traditional cloud workloads and the emerging requirements of AI-centric computing.

Market Context and Performance

The AI boom has historically impacted Amazon’s market valuation. On October 31, 2025, Amazon shares surged more than 11% in early trading following strong growth in the cloud unit and a bullish sales outlook, which addressed previous concerns that the company was trailing its competitors in the AI space.

The current expansion highlights the critical role of specialized hardware and scalable cloud environments in the deployment of large-scale AI models. By securing agreements with companies like Nvidia and OpenAI, AWS is integrating the necessary compute power to sustain high-growth trajectories through 2027.