Amazon shares jumped 3.08% after Morgan Stanley raised its price target to $300 following a major expansion of Amazon's partnership with OpenAI. The deal includes an incremental $100 billion commitment to AWS, bringing OpenAI's total cloud spending to a staggering $138 billion. This eight-year agreement adds a year to the existing term and validates Amazon's in-house silicon strategy.

OpenAI has committed to consuming approximately 2GW of Trainium capacity across Trainium3 and the upcoming Trainium4 chips expected in 2027. This partnership demonstrates AWS's success in diversifying beyond Nvidia's dominance in AI hardware. Analysts view this as potentially lowering long-term capital intensity while improving yields for Amazon's cloud division.

The expanded deal integrates custom OpenAI models into Amazon's customer-facing applications and positions AWS as the exclusive third-party cloud provider for OpenAI Frontier. Morgan Stanley raised its 2026 and 2027 growth forecasts for AWS to 29% and 32%, respectively, citing increased confidence in the division's durability. The massive cloud commitments provide a significant tailwind to Amazon's valuation and de-risk the AWS growth narrative for years to come.