Jim Cramer says investors should act quickly while Amazon stock is still on sale shelves. Jim Cramer said at the club’s morning meeting Tuesday that BMO Capital Markets’ decision to raise its estimate for Amazon’s cloud unit is a “clear call to buy” on the stalling stock. Despite taking a step in the right direction in the third quarter, Amazon was the worst performer of the Magnificent Seven stocks this year due to growth concerns in Amazon Web Services (AWS). In fact, the reacceleration of AWS is one of the main reasons why Investment Club considers Amazon one of the top 5 stocks to rise in 2026. BMO analysts now expect Amazon Web Services’ revenue to grow 24% in the first quarter of fiscal 2026, up from their previous estimate of 23%. After consulting with former AWS employees, BMO sees signs of an upturn in Amazon’s lucrative cloud business, saying it will see “a significant acceleration in customer cloud commitment” in the coming months. According to FactSet, AWS is expected to grow 22.4% in the fiscal first quarter, following an estimated 21% increase in the fourth quarter. Cloud computing revenue rose 20.2% year-over-year in the third quarter, growing at a level not seen since 2022 and beating expectations at the time for an 18.1% increase. The stock rose nearly 14% in the two sessions following the earnings release late October 30th, and closed at a record high of $254 on November 3rd. After that, the stock price fell to around $222, which was before the earnings announcement. Jim was undeterred. “If AWS can reach 30x revenue next year with some confidence that it’s going to grow,[Amazon CEO Andy Jassy]will come out of this situation, and that would be great,” he said on Tuesday’s “Squawk on the Street” show. According to FactSet, Amazon’s stock price is about 28 times estimated earnings per share for fiscal 2026. AMZN YTD Mountain AMZN stock price year-to-date performance. Another factor BMO cited as a supporter of AWS’s growth is the availability of Anthropic’s artificial intelligence cloud model, which is a favorite among developers. Claude is a large-scale language model (LLM) available on AWS. Analysts said Amazon’s $8 billion investment in Anthropic will help AWS maintain its top spot in the cloud space. In addition to raising its estimate, BMO raised Amazon’s price target by $3 per share to $303 and reiterated its Outperform Buy rating. The club has a target price of $275 on Amazon and a rating of 1, which equates to Buy. (See here for a complete list of Jim Cramer Charitable Trust stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
