Microsoft vs. Amazon are drawing renewed attention from investors after robust quarterly results, with Wall Street largely positive on both names and slightly stronger enthusiasm for Amazon’s upside potential.
Microsoft and Amazon continue to dominate the conversation around artificial intelligence and cloud computing, as investors evaluate which company is better positioned to capture long-term growth from these secular trends.
Microsoft vs. Amazon: Microsoft starts to hit its AI stride
Investor skepticism around Microsoft stemmed from doubts that its artificial intelligence assistant, Copilot, was gaining sufficient traction, especially given its central role in the company’s AI push.
The stock was also caught up in a broader software sell-off as some investors questioned whether Microsoft 365 could maintain its moat if AI accelerated the pace at which competitors replicate features.
Recent results helped shift that narrative. Paid Copilot subscriptions rose by 10 million during the quarter to 30 million, doubling the net additions from the prior period.
Microsoft’s Azure cloud unit surpassed $100 billion in revenue for the first time, up 43% year over year, signaling that heavy capital spending is beginning to translate into growth.
According to analyst surveys over the past three months, 34 of 35 analysts rate the shares a buy and one recommends holding. The average price target points to nearly 21% upside, based on TipRanks data.
Following the report, Goldman Sachs analyst Gabriela Borges reiterated a buy rating and lifted her target to $640, describing the quarter as an inflection point that addressed key investor concerns. She added that while inflation has raised AI investment costs, Microsoft is holding to its long-term margin objectives.
The latest trends suggest that evidence of execution on Copilot alongside Azure’s acceleration supports a constructive view on the stock.
Microsoft vs. Amazon: AWS notches fastest growth in 18 quarters
Amazon’s cloud arm, Amazon Web Services, led the company’s quarter. Revenue reached $42.2 billion, topping estimates by roughly $1.7 billion and rising 37% year over year, the fastest pace in 18 quarters.
Amazon increased its full-year capital expenditure outlook to $220 billion, citing higher memory costs. Chief Executive Officer Andy Jassy said demand remains intense, adding on the earnings call, “Even at that amount [of capex], we will still not have enough capacity to meet all the demand we have in 2026, and I believe this dynamic will also be true in 2027, too. In fact, the demand we already have for 2028 is striking.”
Over the past three months, 37 of 38 analysts rate the stock a buy and one a hold, with an average price target implying about 23% upside, according to TipRanks.
Benchmark’s Daniel Kurnos reaffirmed a buy rating and raised his target to $400, suggesting roughly 40% upside from recent levels. He argued that Jassy laid out a compelling long-term case for owning the shares to participate in the AI build-out. Kurnos estimates the shares change hands at about 10 times operating income before depreciation and amortization.
Overall, sentiment is broadly similar for both Microsoft and Amazon, with Wall Street expecting continued benefits from their large-scale AI and cloud investments. Risks remain if those investments do not yield the anticipated returns, but both companies are seen as well positioned to navigate challenges and deliver durable growth.
Should you buy stock in Amazon right now?
Before considering a purchase, investors should weigh the strong analyst support and accelerating AWS performance against execution risks and elevated capital spending. As always, individual risk tolerance and time horizon are key.