Amazon.com Inc (NASDAQ:AMZN) could see meaningful revenue upside over the next two years as its cloud computing arm, Amazon Web Services (AWS), continues to unlock capacity, according to Oppenheimer analysts.
In a note Monday, Oppenheimer raised its price target on Amazon to $305 from $290 while reiterating an “Outperform” rating. The brokerage said AWS plans to double its capacity by 2027, following a doubling since 2022, with at least 1 gigawatt (GW) added in the fourth quarter.
Based on historical trends, Oppenheimer estimates that each incremental GW could generate roughly $3 billion in revenue, suggesting a potential 14% to 22% upside to analysts’ 2026 and 2027 AWS revenue forecasts. For the fourth quarter alone, the unlocked capacity could add about $3 billion in sequential cloud growth, compared with Street estimates of $1.8 billion to $2.1 billion.
“AWS capacity has been a material headwind to re-acceleration since the second quarter of 2024, but starting in the third quarter of 2025, the company began unlocking capacity and accelerating growth,” Oppenheimer analysts wrote.
The analysts also highlighted improving returns on AWS capital expenditures, noting that the capex-to-revenue ratio, which increased from 41% in 2023 to 77% in 2025, could trend back toward historical norms by 2027.
On the retail side, Oppenheimer said investor expectations for Amazon’s holiday sales are already muted, citing Adobe forecasts of a 5% year-over-year increase, down from 9% in 2024.
The brokerage’s $305 target is based on 10 times projected 2027 AWS revenue and five times 2027 e-commerce gross profit, with potential upside to the mid-$300s if AWS growth exceeds expectations.
AWS is set to kick off its annual re:Invent conference on December 1, which could provide further insights into capacity expansion and technology efficiency, though analysts cautioned that the event has historically had a limited impact on stock performance. Last year, however, Amazon shares rose 13% around the event.