Despite concerns over Amazon Inc. (NASDAQ:AMZN) investing heavily in AI, BNP Paribas analyst Nick Jones believes the company is poised to meet the growing cloud demand.

Jones, in a note released on Tuesday, said “concerns are overdone,” and argued that Amazon’s increased spending is “appropriate and necessary given demand levels and the size of the future opportunity,” reported Market Watch.

He emphasized the company’s accelerating backlog growth and noted that Amazon and other hyperscalers like Google (NASDAQ:GOOGL) (NASDAQ:GOOG) are constructing data centers in line with the surge in contracted demand.

Jones advised investors to focus on the backlog-to-capex ratio, which compares contracted demand to infrastructure spending, rather than total spending. Jones believes that with a robust backlog, Amazon can instantly convert available capacity into revenue.

Jones also pointed to rising revenue per employee at Amazon, interpreting it as evidence of productivity gains as firms shift from physical to digital labor while expanding AI and cloud operations. Amazon's revenue per employee has risen from $319,600 in FY 2022 to nearly $455,000 in FY 2025 based on company filings.

BNP Paribas maintained his outperform rating on the stock, predicting a 50% upside from current levels. 

Tech Giants Double Down on AI

The AI revolution is reshaping the U.S. economy, with hyperscalers like Amazon and Meta Platforms (NASDAQ:META) leading the charge. A March report highlighted a record $45 billion under-construction data center, officially surpassing traditional office buildings construction for the first time in history, driven by AI spending.

Amazon’s CFO Brian Olsavsky had earlier defended the company’s AI spending during a Q4 earnings call, stating that the new AWS capacity is being monetized quickly. CEO Andy Jassy stated that the company aims to spend $200 billion in capex by the end of 2026. Most of it will go to AWS, primarily for AI infrastructure, with some also supporting faster-than-expected growth in non-AI workloads.

Despite the tech sector appearing beaten up in March, Goldman Sachs analysts see a historical tech value opportunity in the ‘Magnificent Seven’, which includes Amazon. The firm argues that the Iran conflict has so far been priced as an inflation and rate shock, weighing on tech stocks. But if it shifts into a growth shock that limits rate hikes, tech—less sensitive to economic cycles—could become more attractive and act as a defensive play.


Benzinga's Edge Rankings place Amazon in the 68th percentile for quality and the 94th percentile for growth, reflecting its strong performance in both areas. Benzinga’s screener allows you to compare Amazon’s performance with its peers.  

Price Action: On a year-to-date basis, Amazon.com stock declined 5.62%, as per data from Benzinga Pro. On Tuesday, it closed 0.46% higher at $213.77.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image Credit: Jay Biggerstaff-Imagn Images