Amazon Stock Gets Stunning Price Target Hike on AWS Growth

Amazon (AMZN) and Intel (INTC) reported Q3 2026 results, both investing heavily in AI. Amazon's AWS revenue grew 39% to $45.98B, with strong backlog. Intel's Data Center/AI revenue rose 78% to $7.32B, but its foundry unit lost $1.85B. Amazon plans $220B capex, while Intel raised $23B in equity, warning of negative free cash flow in 2027.

Meta plans to raise up to $95B through stock sales, joining other Big Tech firms like Alphabet, Amazon, and NVIDIA in seeking large-scale financing for AI expansion. These companies are turning to debt and equity markets, marking a shift from relying solely on operating cash. Meta's plan includes a $35B stock offering and a $60B at-the-market program, pending Class C share trading in early 2027.

Amazon has secured up to $80 billion in supplier financing for technology infrastructure, reflecting its significant AI build-out costs. The company's free cash flow was a $34.8 billion outflow in Q3, indicating heavy spending. Chamath Palihapitiya notes AI companies' funding needs may compete with Treasury issuance, potentially raising borrowing costs. Amazon's 2027 capex outlook, due in early February, will provide further clarity on its financial requirements.

Blackstone and Goldman Sachs executives stated that the AI boom requires significant capital raises, with global tech spending exceeding $730 billion in 2026. Blackstone's Jon Gray highlighted Meta, Google, and Oracle as potential equity issuers. Alphabet, Meta, and Amazon reported substantial capital expenditures and negative free cash flow. Goldman's David Solomon noted that strong companies can still raise funds despite market volatility.

Amazon's shares fell 7% in six months, with CEO Andy Jassy stating investors underestimate its retail progress. Q3 revenue and EPS missed estimates, with Q4 guidance below expectations. Jassy highlighted retail growth, including $90B in gross sales over the past year and 15% year-over-year unit growth.

The Nasdaq Composite fell 1.07% to 25,164.36 on 2 November 2026, reversing an early rally. Tech stocks led losses, with Oracle down 8% after a $20B capital raise, AMD and Micron also declining. Marvell and Lumentum fell sharply after their $115B merger deal. Apple reported earnings but slipped 1% after hours. Investors are concerned about AI spending and growth.