Amazon's stock peeks into record territory, as the AI script has flipped to a positive

By William Gavin

Investors are closely watching Amazon Web Services, which analysts see showing strong growth throughout 2026

Amazon Web Services' revenue has grown year over year for the past three quarters. Truist Securities sees it continuing that streak for the first quarter of 2026.

Shares of Amazon moved briefly into record territory on Friday, just a few months after fears over the tech giant's massive planned spending on artificial intelligence triggered a major selloff.

Amazon's stock rallied as much as 2.6% to an intraday high of $256.18 in morning trading, above the Nov. 3, 2025, record closing price of $254, before paring gains to be up 0.5%, just below $251, in recent afternoon trading. That November record close had followed Amazon's announcement of a $38 billion AI compute deal with OpenAI.

It was that investment, which was part of Amazon's announced plans for $200 billion in capital expenditures - most of which is expected to focus on AI - that had spooked investors. Those plans had overshadowed growth in the company's Amazon Web Services cloud business and worried investors about whether Amazon would be the first AI hyperscaler to report negative free cash flow.

The stock had tumbled as much as 21.7% from its record close to a nine-month low of $198.79 on Feb. 13.

But in a stark reversal after that low, AI-related news started to lift the stock. Amazon in February committed to invest $50 billion in OpenAI. The two companies also agreed to increase the value of the November deal, which will give OpenAI access to 2 gigawatts of Trainium capacity over the next several years.

Recent gains are also, in part, thanks to a deal with OpenAI. A leaked memo this week showed that the AI lab sees its relationship with Amazon as part of a plan to win over enterprise customers.

Amazon's stock has gained 5.3% this week and has soared 20.5% so far in April, which puts it on track for the best monthly performance since it shot up 22.8% in January 2023.

In a letter to shareholders this month, Amazon CEO Andy Jassy said that the AI revenue run rate for AWS was over $15 billion in the first quarter of 2026. Total revenue from Amazon's custom chip business also exceeded a $20 billion annualized run rate.

And Wedbush analyst Dan Ives wrote in a Friday note that he believes Wall Street is underestimating the cloud growth rates for AWS, as well as for Microsoft's (MSFT) Azure. And in another Friday note, Truist Securities analyst Youseff Squali wrote: "We believe the area of focus among investors remains AWS," adding that he expects 25% year-over-year growth for the first quarter, slightly above the Wall Street consensus.

AWS has showed year-over-year growth in each of the past three quarters, Squali noted.

See: A bullish indicator for software stocks just flashed. Why a true comeback could be in the cards.

Amazon's stock is also benefiting from investor interest in the company's latest proposed acquisition, an up to $11.6 billion deal to acquire Globalstar (GSAT) that could help Amazon compete with SpaceX. The agreement would give Amazon access to Globalstar's satellites, infrastructure and precious spectrum licenses. It would also deepen the relationship between Amazon and Apple (AAPL), a major Globalstar shareholder.

See: How the Globalstar purchase could turn Amazon's Leo into a satellite powerhouse

"You can spend huge amounts of money on satellites, but you cannot shortcut spectrum and licensing in the same way," Shay Boloor, chief market strategist at Futurum Equities, told MarketWatch via email.

Boloor also called the acquisition an "incredible move" that turns Amazon's satellite-internet division into a "broader connectivity moat."

-William Gavin

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04-17-26 1532ET