Amazon.com Inc. (AMZN) is back in the AI spotlight. After months of skepticism over slowing cloud growth and competitive headwinds, the e-commerce and cloud giant has staged a dramatic comeback. A powerful combination of robust earnings and a landmark partnership with OpenAI has reignited investor enthusiasm, sending Amazon’s stock soaring and restoring its place among the technology elite driving the next phase of artificial intelligence.

AWS Delivers a Powerful Rebound

Amazon’s third-quarter results revealed the fastest growth for Amazon Web Services (AWS) since 2022 — a long-awaited turning point for the company’s most profitable division. AWS, which had been under pressure amid fierce competition from Microsoft Azure, Google Cloud, and Oracle, posted a 20% year-over-year revenue increase. The strong showing was quickly followed by a $38 billion deal with OpenAI, solidifying AWS’s critical role in powering the world’s most advanced AI models.

Together, these catalysts delivered a 12% surge in Amazon’s stock across four sessions — a move that added roughly $300 billion in market capitalization and pushed the shares to their first record high since February. For many investors, it marked the beginning of a new phase for Amazon, one defined not by its e-commerce dominance but by its AI infrastructure leadership.

“Taken together, the results and the OpenAI deal suggest that the acceleration in AWS growth could be sustainable,” said Robert Pavlik, senior portfolio manager at Dakota Wealth Management. “Investors are going to have to take Amazon more seriously in the AI space — it’s finally delivering tangible returns from its massive cloud and AI investments.”

Closing the Gap with AI Rivals

Despite this rally, Amazon remains an underperformer in 2025 compared with its tech peers. The stock’s 14% gain trails the S&P 500’s 16% and the Nasdaq 100’s 22%, as well as the outsized performance of Nvidia, Microsoft, and Alphabet. Yet analysts say this could work in Amazon’s favor. The company’s valuation — now around 27 times projected profits — remains well below its decade-long average of 47 times earnings, leaving room for multiple expansion if AWS growth sustains.

Evercore ISI analyst Mark Mahaney believes that momentum could trigger a major re-rating. “With materially increasing odds that AWS has recovered to becoming a sustainably 20%+ revenue growth segment, the stock opportunity ahead is for a material AMZN re-rating,” he wrote in a recent note.

Amazon’s resurgence is reshaping how investors view the so-called “Magnificent Seven.” For much of the year, Amazon was the laggard of the group. Now, with AI as a catalyst, it is being recast as one of the sector’s most promising comeback stories.

AI Competition Intensifies

Still, Amazon’s path forward won’t be without resistance. Its biggest cloud rivals, Microsoft and Alphabet, also reported strong cloud growth in recent weeks, while Oracle continues to close the gap with aggressive infrastructure investments. The landscape is becoming increasingly defined by high-stakes partnerships and scale advantages, forcing each player to innovate or risk falling behind.

To maintain its edge, Amazon is betting heavily on integrating generative AI across its ecosystem — from AWS developer tools and Alexa’s evolution to logistics optimization and advertising intelligence. The company’s renewed focus suggests it sees AI not just as a product category but as the backbone of its next decade of growth.

“The cloud business is back, and if you look across the Magnificent Seven, Amazon has gone from the laggard to the leader,” said Matt Tuttle, CEO of Tuttle Capital Management. “If you’re buying for long-term AI exposure right now, Amazon looks like the value play.”

What’s Next for Amazon’s AI Push

Looking ahead, the sustainability of Amazon’s momentum depends on how effectively it can convert its infrastructure strength into differentiated AI solutions. Analysts expect AWS revenue growth to continue accelerating through 2026, supported by rising enterprise demand for generative AI and the company’s deepening partnership ecosystem.

Yet challenges remain. The competitive intensity of the cloud market, regulatory scrutiny over data governance, and the massive capital demands of AI innovation will continue to test Amazon’s ability to balance profitability with growth.

For now, however, investors appear convinced that the company has reasserted itself as a central player in the AI era — one capable of turning its scale into staying power.