Key Stats for Amazon Stock
- Current Price: $248.23
- Target Price (Mid): ~$597
- Street Target: ~$330
- Potential Total Return: ~141%
- Annualized IRR: ~23% / year
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What Happened?
Amazon (AMZN) will raise prices on most reserved Nvidia GPU capacity by 15% or more starting October 7, according to its Capacity Blocks pricing page. It is the product’s third increase of 2026. On October 2, Bloomberg relayed a Financial Times report that Amazon is exploring a deal to move about $8 billion of Nvidia (NVDA) chips off its balance sheet. Both moves bear on AWS’s 39.3% second-quarter operating margin. Shares closed at $248.23 on October 1, and full results are in Amazon’s investor relations materials.
The October 7 Hike Spares Trainium and Existing Reservations
The new rates lift seven Nvidia instance types by 15% in U.S. regions. For example, Blackwell Ultra (P6-B300) capacity rises from $14.04 to $16.146 per accelerator-hour. AWS is also moving to a single rate across its commercial regions, so some overseas prices jump further: H100 capacity in Tokyo goes from $4.720 to $5.970, a 26.5% increase.
GB200 UltraServer, Trainium, on-demand, and Savings Plans prices stay unchanged, and customers keep the rate in effect when they booked. AWS raised the same product by about 15% in January and by about 20% in July.
On the July 30 earnings call, Wells Fargo’s Ken Gawrelski asked how AWS pricing handles cost inflation. CEO Andy Jassy said, “the deals that you sign, those will be the prices and those will be the agreements that we have over the duration of that contract.” New agreements, he added, take current costs into account, and he named memory, hard drives, and SSDs as inflated. Holding Trainium flat also makes Amazon’s own chip relatively cheaper to reserve, and Anthropic and OpenAI have already made multiyear, multi-gigawatt commitments to it.
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Depreciation Is Climbing About 30% a Year
AWS earned $16.6 billion of operating income on $42.2 billion of revenue in the second quarter. CFO Brian Olsavsky said the margin rose 650 basis points year over year, or 520 excluding an energy-contract accounting gain. He credited efficiency work and capacity optimization, “which we benefited quite a bit from in Q2,” and hedged: “they’ll fluctuate, but very strong performance year-over-year, and we’ll take it.”
Jassy was more confident, saying, “we see the margins and returns in AI tracking what we saw with core at the same point of evolution, actually, a little ahead.”
TIKR consensus has Amazon’s company-wide depreciation and amortization rising from $65.76 billion in 2025 to around $86 billion in 2026 and around $111 billion in 2027, about 30% a year. Analysts still expect consolidated EBIT margin to climb from 11.2% to around 15% over that span, a path that depends partly on AWS pricing new contracts the way Jassy described.
The reported chip deal addresses the funding side. Per the FT account, thousands of Grace Blackwell chips across more than a dozen U.S. data centers would move into a vehicle funded by outside investors, and Amazon would keep using them. These are reported talks, and keeping access to the chips would still carry a cost.
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TIKR Advanced Model Analysis
- Current Price: $248.23
- Target Price (Mid): ~$597
- Potential Total Return: ~141%
- Annualized IRR: ~23% / year
See analysts’ growth forecasts and price targets for Amazon stock (It’s free!) >>>
The model’s mid-case inputs, shown on its 2025 to 2035 forecast table, assume revenue compounds at around 13% a year and net income margin reaches about 16%. That margin matches the Street’s 2030 forecast and is up from 10.8% normalized in 2025. The article uses the mid case because it rests on consensus margins rather than stretching past them.
The main risk is depreciation outrunning pricing. Upside: AWS reprices new business as fast as costs rise. Downside: margins stall near 2026 levels, and the stock leans on revenue growth alone. The Street mean target is ~$330, with 42 Buys, 15 Outperforms, 2 Holds, 3 No Opinions, and no Sells as of October 1.
Conclusion
Amazon’s third-quarter report, not yet scheduled, is the first test. Excluding the energy gain, AWS earned roughly 38% in the second quarter. An AWS margin at or above that level would show pricing covering the depreciation ramp. A slide into the mid-30s would show costs winning, even if consolidated operating income lands inside Amazon’s $22.5 billion to $26.5 billion guidance.
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So what is Amazon stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
