BNP Sees 50% Upside in Amazon as AI Spending Pays Off
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- Amazon plans to spend $200 billion on AI capital expenditures in 2026, potentially making it the largest spender among Big Tech peers.
- BNP Paribas analyst Nick Jones set a $320 price target on Amazon, implying more than 50% upside, calling the AI capex "appropriate and necessary given demand levels and the size of the future opportunity."
- Amazon shares have fallen 8% year-to-date even as Jones said concerns about elevated spending are "overdone" and that the company's backlog growth has accelerated in recent quarters.
- Amazon's backlog-to-capex ratio is the metric investors should track, per Jones, who estimates every gigawatt of data-center capacity costs $50 billion to build and generates $15 billion in annual revenue once online.
- Amazon's revenue per employee climbed from under $300,000 in Q1 2022 to over $540,000 by Q4 2025, a figure Jones uses as a proxy for AI-driven productivity gains replacing physical labor with digital.
- Jones also reiterated an outperform on Alphabet with a $390 price target, saying hyperscalers including Google are building data centers at a pace matched by surging contracted demand.
Why it matters: For Amazon shareholders sitting on an 8% year-to-date decline, Jones is reframing the pain as the opportunity: his $320 target implies a 50% rally premised on the view that $200 billion in AI infrastructure will be rapidly monetized through a growing backlog of contracted cloud demand. The tension is that capex is expected to exceed 100% of cloud revenue, so the bull case depends on Amazon converting every new gigawatt of capacity into paying customers faster than skeptics expect.
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