Amazon shares rise after upgrade, sector strength

Amazon.com Inc. shares climbed 4.2% in morning trading on Monday after Phillip Securities upgraded the stock to Buy from Accumulate and lifted its price target to $330 from $320.

The upgrade was based on strong demand in cloud computing and the company's position in artificial intelligence technology. Analyst Helena Wang pointed to AWS's 39.3% year-over-year revenue growth, marking its fastest expansion in nearly five years.

Wang noted Amazon's approach of using custom Trainium and Graviton chips alongside partnerships with major AI developers as a reason for the higher rating, though she acknowledged near-term cash flow pressure.

The upgrade comes days after Amazon's third-quarter results led to a stock decline. The company reported earnings per share of $1.89, which fell short of analyst expectations. Operating income increased 61% year-over-year to $28.1 billion, while AWS revenue reached approximately $46 billion.

Morgan Stanley maintained its Overweight rating and kept Amazon as a top pick, viewing the post-earnings drop as an overreaction. TD Cowen held its Buy rating on the stock.

Citi raised its AI cloud revenue estimates through 2028, pointing to continued demand growth among hyperscale cloud providers as a positive factor for Amazon's cloud business.

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