TLDR
- Amazon plans to invest more than €16 billion (about $18 billion) in Germany in 2027, covering cloud, AI, satellite internet and media.
- AMZN opened at $262.45 on Tuesday, with a market cap of $2.83 trillion.
- Morgan Stanley named Amazon a top pick and raised its price target to $350 from $335.
- Wall Street’s average price target is $322.53, with 57 Buy ratings and three Hold ratings.
- Capital spending of about $220 billion a year, negative free cash flow and rising debt remain risks.
Amazon (AMZN) stock opened at $262.45 on Tuesday as the company said it plans to invest more than €16 billion in Germany in 2027. The figure is about $18 billion.
The announcement came at the Invest in Germany Summit in Berlin. It adds to the more than €100 billion Amazon says it has put into the country since 2010.
The stock sits above its 50-day moving average of $256.44 and its 200-day moving average of $252.31. Its 52-week range runs from $196.00 to $287.20.
What the Germany Package Includes
The biggest piece is €4.8 billion to expand the Frankfurt cloud region for Amazon Web Services and its AI infrastructure. That is the largest named item in the plan.
Amazon also lists new logistics projects that it expects to create more than 3,000 jobs. It plans to develop the Amazon Leo satellite broadband network and fund new Prime Video productions too.
A second robotics and AI research lab in Berlin is also on the list. Amazon did not give a cost for that item.
The move follows a €10 billion commitment in June 2024. That earlier plan included €8.8 billion for AWS data centres.
Analysts and Investors Weigh In
Morgan Stanley named Amazon a top pick last week. It raised its price target to $350 from $335 and kept an Overweight rating.
The firm points to an “under-appreciated” AWS growth runway. It expects AWS growth of about 47% in 2027.
Other targets include $355 from Evercore, $325 from Roth Capital and $310 from both Wedbush and HSBC. Zacks Research cut its rating to hold from strong-buy in September.
MarketBeat data shows 57 analysts rate the stock a Buy and three rate it a Hold. The consensus is Moderate Buy.
On the AI side, Amazon launched TorchNeuron. The tool lets developers run PyTorch applications on Trainium chips with minimal code changes. Amazon also agreed to fund a proposed 960-megawatt nuclear plant in Indiana and plans to buy its power.
Not everyone is cheering. Commentary points to planned capital spending of roughly $220 billion a year, negative free cash flow and higher long-term debt.
Amazon last reported earnings on July 30. It posted EPS of $5.75 against estimates of $1.82, on revenue of $200.61 billion.
Walker Asset Management nearly doubled its stake in the third quarter. It added 9,148 shares to hold 18,397 shares worth about $4.58 million.
The stock trades at a price-to-earnings ratio of 21.11 and has a beta of 1.45. Its next test comes with the third quarter earnings report.
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