Anthropic: The $25 billion engine hidden inside Amazon’s cloud

Wolfe Research highlighted Amazon's growing AI power through its partnership with Anthropic in a report published on March 1, 2026, revealing that the collaboration is projected to generate $25.02 billion in AWS revenue by 2027, significantly more than the $3.9 billion expected in 2025. The analysts maintained an Outperform rating on Amazon's stock with a $250 price target, suggesting that investors are overlooking the massive scale of this strategic partnership. According to the report, this isn't merely a hosting agreement but a sophisticated multi-layered monetization strategy encompassing cloud computing services and the extensive utilization of proprietary Trainium chips. The two companies have established a lucrative revenue-sharing model through the Bedrock platform, which has already achieved a "multi-billion dollar" annual run-rate by the end of 2025. Wolfe estimates that AWS will hit 30% year-over-year revenue growth in both 2026 and 2027, outperforming the 25% growth currently anticipated by the market. This optimistic forecast is driven by the integration of one million Trainium chips, which are expected to contribute substantial growth to Amazon's cloud segment over the next two years. Total AWS revenue by the end of 2027 is projected to reach $216.5 billion, including $5 billion from OpenAI and over $23 billion from incremental capacity increases. The report suggests that even with a challenging macroeconomic environment, Amazon's leadership in both e-commerce and cloud computing provides a unique "triad" of growth catalysts. In a "bull case" scenario, if Anthropic's revenue exceeds $60 billion by 2027, it could potentially provide a 4% total uplift to the existing AWS revenue model. While Amazon currently trades at approximately 20.8x FY27 EPS, Wolfe's price target is based on a 25x multiple, reflecting a premium for Amazon's dominant position in AI and its relentless focus on retail cost-cutting. Despite the promising outlook, the analysts caution about potential risks including margin pressure from high spending, intensifying competition from other e-commerce platforms, and the possibility of a global economic downturn that could stall the momentum.