Amazon (AMZN) is surging again as investors investors speculate that the company’s long-awaited cloud turnaround and new artificial intelligence partnerships could reignite its growth story. The stock has gained roughly 12% over the past four trading sessions following its latest earnings report and a landmark $38 billion cloud deal with OpenAI — its best run since early 2022. This has added more than $300 billion in market capitalization, sending Amazon shares to their first record high since February.
AI and Cloud Momentum Reignite AWS Growth
After several quarters of deceleration, Amazon Web Services (AWS) — the company’s most profitable division — delivered 20% revenue growth in Q3, its fastest pace in three years. Analysts say that’s evidence AWS is regaining share in the cloud race against Microsoft’s Azure and Google Cloud.
The timing of Amazon’s deal with OpenAI reinforced that view. The agreement will see OpenAI deploy large-scale workloads through AWS infrastructure, strengthening Amazon’s foothold in AI cloud computing. Investors view the deal as validation that AWS remains a central player in the generative AI boom, even as rivals dominate headlines.
“Taken together, the results and the OpenAI deal suggest that the acceleration in AWS growth could be sustainable,” said Robert Pavlik, senior portfolio manager at Dakota Wealth Management. “Amazon is proving it can translate AI investment into tangible returns.”
Valuation Tailwinds and Investor Re-Rating Potential
Despite the rally, Amazon’s stock remains one of the few “Magnificent Seven” laggards in 2025. Shares are up about 14% year-to-date, trailing the Nasdaq 100’s 22% gain, as investors previously rotated toward higher-flying AI names such as Nvidia, Microsoft, and Alphabet.
That underperformance has now created an opportunity. Amazon’s forward price-to-earnings multiple sits near 27, well below its decade-long average of 47. According to Evercore ISI analyst Mark Mahaney, the stock could nearly double if AWS growth continues above 20% and valuations normalize.
“With AWS showing signs of sustainable recovery, Amazon could be next in line for a significant re-rating,” Mahaney wrote. Consensus forecasts now call for further acceleration in AWS revenue through the first half of 2026, lifting Amazon’s earnings estimates by more than 2% in just the past week.
Competition Remains Strong
Amazon still faces an intensely competitive landscape. Microsoft’s Azure and Google Cloud both reported robust double-digit growth in their most recent quarters, while Oracle continues to chip away at niche enterprise workloads. The race to capture AI-driven demand for compute and data storage remains wide open — but Amazon’s scale, customer base, and developer ecosystem provide a deep moat.
The company’s retail business, though less profitable, remains an important cash engine funding AWS and AI initiatives. Amazon’s continued expansion into logistics automation and generative AI shopping assistants could further diversify growth drivers across its ecosystem.
Looking Ahead
Investors will be watching closely to see if AWS’s momentum holds through the fourth quarter, especially as enterprise budgets tighten. Investors are also awaiting updates on how the OpenAI partnership could evolve into new AI products and services built natively on AWS infrastructure. If current trends continue, Amazon’s latest rally could mark not just a rebound, but the start of a new growth cycle; one driven by AI innovation rather than e-commerce dominance.