Amazon’s AI Spending Appears Justified as AWS Margins Strengthen

Bullish Gator

CFRA’s Arun Sundaram keeps a Strong Buy and $335 target, saying Amazon’s heavy AI capex is paying off via robust AWS operating margins and undervalued long-term growth.

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What stands out

CFRA’s Arun Sundaram doubled down after Amazon’s strong quarter, saying investors are finally becoming comfortable with the company’s massive artificial intelligence (AI) capital spending. He highlights expanding operating margins in Amazon Web Services (AWS) as proof those investments are beginning to pay off, and he kept a Strong Buy with a $335 price target while arguing sell-side models still underappreciate long-term earnings power. This matters because a shift in investor tolerance for heavy capex changes how the market values growth companies that mix retail scale with a high-margin cloud business.