Key Highlights
- Roth Capital Markets analyst Rohit Kulkarni maintains a “Buy” rating on Amazon with a US$250.00 12-month target.
- Kulkarni expects accelerating growth in AWS due to increased customer traction and new AI Cloud product announcements.
- Amazon’s stake in Anthropic is expected to contribute positively to third-quarter earnings.
- AWS revenue growth forecasts are raised, with an anticipated increase of 18.6% and 19.5% year-over-year in the second half of 2025.
Amazon’s AI Strategy Gains Analyst Support
Roth Capital Markets analyst Rohit Kulkarni has reaffirmed his “Buy” rating on Amazon, citing its potential to become a significant player in the artificial intelligence (AI) market. According to Kulkarni, despite current challenges, such as tariffs and satellite launches, Amazon is well-positioned to capitalize on growing demand for both AI and non-AI cloud services.
Key Player in AI Cloud Services
Kulkarni’s analysis underscores the importance of Amazon Web Services (AWS) within the company’s overall strategy. AWS, a leading provider of cloud computing services, has been at the forefront of innovation, particularly with its series of AI cloud product announcements. These products have demonstrated growing customer traction and are expected to drive significant growth in the second half of 2025.
Revenue Forecasts and Growth Projections
Roth Capital Markets is now modeling AWS revenue growth at an accelerated rate, with year-over-year increases of 18.6% and 19.5% for the latter part of this year. This upward revision reflects Kulkarni’s optimism regarding the company’s ability to leverage its AI initiatives effectively. Additionally, Amazon’s stake in Anthropic, estimated between 12-14%, is expected to positively impact third-quarter earnings through valuation adjustments.
Strategic Initiatives and Potential Challenges
AWS is set to gain further momentum with the introduction of advanced hardware like Trainium 3, built on a 3-nanometre process. This powerful new technology could provide twice the performance compared to its predecessor and may be previewed at re:Invent 2025. Moreover, Project Rainier, which is expected to roll out in U.S. data centers, will contribute additional capacity to AWS, potentially enhancing growth prospects.
However, Kulkarni also notes that retail margins could face pressure from tariffs and accelerated satellite launches for the Project Kuiper constellation. Despite these challenges, Kulkarni believes that pricing impacts have not fully materialized yet, and Amazon has not adopted significant cost offsets to mitigate these issues.
Conclusion
In conclusion, despite the myriad of challenges, Roth Capital Markets’ analyst Rohit Kulkarni sees a bright future for Amazon in the AI space. With continued innovation, strategic acquisitions like Anthropic, and robust cloud services offerings, Amazon remains a top pick among mega-cap technology firms.
