The bullish case for Amazon's stock builds even further thanks to these two factors

By Christine Ji

Amazon's cloud-computing business could pick up more steam given new developments at major customers Anthropic and Pinterest

Anthropic is expected to dramatically increase its spending on inference workloads in the next few years, which translates to more revenue for Amazon.

There's more good news for Amazon.com after its impressive third-quarter results and its recent deal with OpenAI.

Mizuho analyst Lloyd Walmsley wrote in a Tuesday note that Amazon's (AMZN) cloud-computing business is on track to accelerate even more thanks to two factors: increased growth projections from its major partner Anthropic and a strategic business shift from Amazon Web Services customer Pinterest (PINS).

AWS has been the biggest driver of Amazon's stock price in 2025 as investors focus on the artificial-intelligence trade. Last week's earnings report helped Amazon shake its reputation as an AI laggard after the company reported 20% AWS growth. The stock has risen 12% since, catapulting Amazon from the worst-performing "Magnificent Seven" name on a year-to-date basis to the fourth-best.

Privately held Anthropic significantly raised its financial estimates, according to a Tuesday report from The Information, which Walmsley believes will translate to increased AI workloads for AWS, especially in inferencing tasks.

Anthropic is reported to be projecting $70 billion in revenue and $17 billion in cash flow by 2027. Anthropic's cost of goods sold is expected to grow from $2.5 billion today to $10.9 billion by 2027, and Walmsley anticipates that most of the money will go toward paying for cloud infrastructure, translating to more incremental revenue for AWS.

Read on: Why Anthropic's fresh $183 billion valuation is good news for Amazon

Inference workloads, or the cost of running AI models, are expected to overtake training workloads as AI technology advances. It's a shift that Walmsley believes will benefit Amazon, as the company's custom chips have an advantage in providing cost-effective compute services. While Anthropic uses both Alphabet Inc.'s (GOOGL) (GOOG) Google Cloud and Amazon Web Services for inference training, Amazon remains Anthropic's "primary training provider and cloud provider."

AWS is also seeing tailwinds in its core cloud business. On Pinterest's Tuesday earnings call, the company shared that it anticipates its cost of goods sold to accelerate from the end of 2025 into 2026, in part due to "diminishing returns" from the infrastructure cost optimization initiatives that Pinterest has undertaken for the last two-plus years.

Walmsley sees Pinterest's commentary as an "encouraging" sign that a broader "optimization roll-off" trend may be ending, resulting in more cloud spending and AWS revenue. Pinterest's development is a big deal for AWS, as cloud spending accounts for almost 90% of Pinterest's cost of goods sold, according to Walmsley.

Walmsley did caveat that Pinterest could be looking for new cloud infrastructure providers, which indicates an increasingly competitive cloud landscape. But for now, Walmsley believes the positive demand signals for AWS outweigh the risks.

Walmsley gives Amazon's stock an outperform rating and a price target of $315.

Read: Amazon's stock soars as earnings show 'the AI narrative has flipped positive'

-Christine Ji

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11-05-25 0903ET