Compute Capacity Offering Support to Amazon (AMZN)

Amazon.com Inc. (NYSE:AMZN) is one of the 10 best retail stocks with huge upside potential. On February 23, Wells Fargo reduced its target price for Amazon.com Inc. (NASDAQ:AMZN) from $305 to $304. The firm maintained an Overweight rating on the stock, offering more than 40% upside potential to investors at the current level.

Wells Fargo notes that the compute capacity is a key success factor for Amazon.com Inc. (NASDAQ:AMZN), as AI-driven demand is expected to surpass supply in the near to medium term. The hyperscaler capacity is forecasted to double to 98GW with capital spending of $860 billion per year by 2027, and the cloud market is seen to expand much faster than consensus.

Back on February 6, Oppenheimer reduced the firm’s price target on Amazon.com Inc. (NASDAQ:AMZN) from $325 to $260. However, the firm maintained its Outperform rating on the stock, yielding a revised upside of almost 20% despite the downward adjustment.

The revision came at the back of the company’s quarterly results. Despite a higher capex outlook driving the change, the firm remains confident in an AWS ramp supported by accelerating revenue and market share gains.

Amazon.com Inc. (NASDAQ:AMZN) is a technology company engaged in e-commerce, cloud computing, streaming, AI solutions, and physical retail. It offers consumer retail, advertising, and subscription solutions through an extensive network of online and brick-and-mortar stores worldwide. The company also develops and sells electronic devices, including Kindle, Fire tablets, Fire TVs, Blink, and eero.

While we acknowledge the potential of AMZN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.