Wells Fargo analyst Ken Gawrelski maintained Amazon.com with an Overweight rating and raised the price target to $313 from $312, as investors weigh a Prime Day sales pull-forward against fresh pricing power in Amazon Web Services. The firm sees stronger June retail data and a 20% price increase on select AWS GPU workloads as setting up a cleaner second-half growth story. Amazon stock was down 0.86% at $238.07 at the time of publication Tuesday, having declined about 10.6% over the past month versus a 1.6% decline in the S&P 500.

Prime Day Performance and Consumer Behavior

Adobe Analytics data show U.S. online retail spend during the Prime Day window at roughly $26.4 billion, up 9% year over year. This result lines up with Bank of America’s expectation for mid-single-digit global GMV growth as some international events move into the third quarter. Discounts were broadly similar to last year, but Numerator data flagged an 11% drop in average order value on Amazon and softer satisfaction scores, pointing to a customer shift toward everyday essentials and grocery rather than big-ticket items. Even with smaller baskets, BofA still expects Amazon’s North America retail segment to slightly beat Street estimates for about 14% year-over-year growth.

The catch for near-term traders is timing. Bank of America estimates around $7 billion to $8 billion of sales likely shifted into the second quarter from the third quarter due to this year’s Prime Day schedule, creating potential noise around Amazon’s Q3 outlook even if full-year fundamentals remain intact.

AWS Price Hike and Analyst Outlook

On the cloud side, Amazon quietly announced a roughly 20% price increase effective July 1 for EC2 Capacity Blocks tied to GPU-heavy machine-learning workloads, following a prior 15% hike in January. Bank of America’s work suggests effective prices paid by customers have already risen from 2022 trough levels, and the new adjustment should add an estimated 1–2 percentage points to second-half AWS growth. Beyond core capacity, the firm points to ramping commitments from OpenAI and Anthropic on AWS infrastructure, reinforcing a view that Amazon is leaning into AI demand with greater pricing discipline.

BofA flags some risks including tougher competition from offline and local retailers, cloud share battles in advanced AI and heavy AWS investment that could pressure margins if macro conditions soften. Still, with solid Prime Day demand and AWS asserting pricing power in AI workloads, Amazon’s stock remains a key name to watch as the market balances short-term guidance noise against a strengthening multi-year thesis.

Amazon is ramping up efforts to produce custom chips for its key consumer devices, a strategy revealed by the company’s head of devices and services. Panos Panay shared details of the semiconductor initiative, noting that Amazon is manufacturing its own end-to-end silicon for devices it ships. This includes hardware such as the Echo Show 8, Echo Show 11, and Fire TV.

The company unveiled the AZ3 and AZ3 Pro chips last October. These components are designed to run AI models directly on devices rather than relying on the cloud. This approach is often considered faster and more secure. Despite the increased focus on in-house production, Amazon continues to utilize chips from other manufacturers, including Qualcomm.

Amazon Builds Its AI Ecosystem

The intensified focus on chip production aligns with Amazon’s broader initiatives to enhance AI capabilities. The company has rolled out Alexa+ across the U.S., an upgrade to its voice assistant designed to handle complex tasks and connect devices across the Ring, Echo, and Fire TV ecosystem. In May, Amazon launched Alexa for Shopping, an AI shopping bot that transforms the search bar into a Q&A engine.

Bank of America recently reiterated its Buy rating on Amazon, citing the potential of Alexa AI to drive engagement during Prime Day. Analysts view the event as a strategic opportunity to increase awareness of the company’s AI-powered shopping assistant.

The Future of AI Devices

Panay indicated that advances in AI could shift computing beyond traditional apps and screens toward more natural, context-aware conversations. However, the specific future form factor for AI devices remains uncertain. Separately, Qualcomm CEO Cristiano Amon noted that his company is working on more than 40 AI-powered devices, including smart glasses and earbuds, designed to act as personal AI assistants.