Why is Amazon stock rallying today?

France's National Assembly approved a 5.5-cent-per-gigabyte data tax, targeting global digital giants like Netflix, Google, Meta, Amazon, and Akamai. The tax aims to generate €10 billion annually and promote digital moderation. The Finance Committee initially rejected the amendment, but a public vote secured its passage.

U.S. stock indices rose midday Nov. 2, with the Dow up 1.05%, Nasdaq up 0.76%, and S&P 500 up 0.64%. Amazon gained 4% on cloud growth, Oracle fell 6.2% after a $20B fundraising plan, and ExxonMobil dropped 2.2% as oil prices fell 7% on diplomatic hopes. Mohawk Industries rose 7.67% on a share buyback plan.

Amazon (AMZN) stock rose 5% to $251.77 after Phillip Securities upgraded it to Buy with a $330 price target, citing AWS growth. Q3 earnings missed estimates at $1.89 per share, but AWS revenue hit $46B. Free cash flow swung to a $42.4B outflow due to AI investments. Walmart (WMT) and Alphabet (GOOGL) also saw gains.

Amazon (AMZN) shares rose 5% after Phillip Securities upgraded it to Buy with a $330 price target, citing strong AWS growth of 39% and a low forward P/E. The company's capital spending has outpaced cash flow, with a $42.4B outflow over the past year. Analysts expect normalized EPS to dip in 2027 before rising. Alphabet (GOOG) and Meta (META) also face similar cash flow challenges.

JPMorgan analyst Doug Anmuth projects Amazon's capital expenditure to reach $395B in 2027 and $476B in 2028, driven by AI investments. Amazon's free cash flow turned negative, with a $42.4B outflow in the trailing 12 months, due to increased spending on property and equipment. Shares fell over 1% post-earnings but recovered, up 9% year-to-date.

Anthropic reported $17 billion in Q3 revenue, up 1,127% YoY, but with a net loss of $23.3 billion. The company has $895.4 billion in future AI infrastructure commitments. It filed for an IPO last week, with potential valuations around $1.5 trillion. Key partners include Amazon, Google, Broadcom, and Nvidia.