To The Moon

We saw the sell-off hitting the major tech stocks, Amazon is not spared as well, losing 1.63% on 04 November trading, so can the $38B deal in Nvidia for Amazon and OpenAI turn things around?

In this article, with AI bubble fears is once again back on the table, we would share the breakdown of $Amazon.com(AMZN)$, the huge deal with OpenAI and $NVIDIA(NVDA)$, and whether this can spark another bull run or refuel Amazon toward $300 by end-2025.

The deal and its implications

Amazon’s cloud unit Amazon Web Services (AWS) and OpenAI just signed a US$38 billion multi-year (≈7-year) agreement.

• OpenAI will use AWS infrastructure: “hundreds of thousands” of Nvidia GPUs, plus tens of millions of CPUs.

• For Amazon this is a vote of confidence: it signals that AWS is still in the big-leagues of AI infrastructure, after concerns it was lagging.

• For OpenAI this is about scaling compute power massively to train/run next-gen models.

Why this matters for Amazon:

• It strengthens Amazon’s cloud credibility. AWS has long been a high margin business; if it can ride the wave of generative AI infrastructure demand, there’s upside.

• The deal might attract other big customers who see Amazon as a viable partner in AI compute, which could improve AWS’s growth and margin profile.

• If Amazon executes well (capex, data centres, chips-to-services), the investment could pay off in the medium term.

Why caution is warranted:

• A deal being signed is one thing; monetising it fully, realising margin improvement, and converting compute investment into profits is another.

• The broader AI “bubble” fear is real: lots of hype, big spending, but revenue/profit risks. The market may be sceptical if growth doesn’t translate quickly.

• Amazon has many moving parts (retail, advertising, cloud, logistics). Cloud is only part of the story; execution across the board matters.

So we can say that the deal is a good catalyst for Amazon, and helps them in AI/compute. But it’s not a guaranteed rocket-ship. Execution, margins, market expectations all matter.

Can this trigger another tech/AI bull run?

The announcement may help restore some investor confidence in the AI wave (especially infrastructure/cloud). But whether it triggers a full-scale bull run depends on broader conditions: macro (interest rates, inflation), regulatory risks (AI safety, antitrust), earnings execution, chip supply etc.

The deal is a strong signal that AI compute demand is real, which may reduce some “bubble fear” (i.e., that AI is over-hyped) if Amazon and others deliver. But if the market feels the valuations are ahead of earnings, the opposite could happen (sell-off).

So we believe that it could help fuel a rally (especially in AI/infra stocks), but it’s one piece of the puzzle—not a sole guarantee. Be cautious.

Can Amazon hit $300 by end-2025?

Here are the data points:

Current price (as of the finance data) for Amazon: about US$249.32.

Analyst targets: some have raised Amazon’s target to ~$300. For example:

• Forecast ranges for 2025 end are roughly $208 to $315, depending on assumptions.

Key drivers for Amazon reaching ~$300:

• Sustained AWS growth (20%+ year-over-year) and margin improvement. For example, Q3 AWS grew ~20.2% year-on-year.

• Advertising growth momentum.

• Retail business stabilising or growing in higher-margin areas (logistics, subscription services).

• Cost control, capital efficiency, and meaningful monetisation of AI-related infrastructure/investment.

Risks / hurdles:

• If growth slows (especially in AWS), or margins compress, the valuation will suffer.

• Macroeconomic headwinds: rate hikes, recession risk, inflation, supply chain.

• Execution risk on the AI infrastructure: spending large capex now means rewards may come later; early income may not fully offset cost.

• The $300 target implies ~20-25%+ upside from current ~$249 (depending on when you measure), which is significant.

Our take:

Given the above, I believe Amazon can reach $300 by end-2025, but it’s not the highest-probability outcome. It is a bull-case scenario. A more moderate scenario might see something in the ~$270-$290 range. If everything goes well (AWS acceleration, AI monetisation, favourable macro), $300 is within reach.

Verdict

The $38 billion deal between Amazon and OpenAI (with Nvidia GPUs involved) is a very positive signal for Amazon’s cloud/AI positioning.

Whether this deal alone will trigger a massive bull run depends on many factors; it helps but is not sufficient.

For Amazon to hit ~$300 by end of 2025 is plausible, especially if catalysts align, but it should be seen as an optimistic target rather than a sure-thing.

In the next section, we would like to share the probability-scenarios for Amazon.com, Inc. (AMZN) reaching various price levels by end of 2025 — estimates only, not guarantees. They are based on current analyst targets, macro risks, and execution possibilities.

Summary of key inputs

• Analysts show targets in a relatively narrow band: many foresee ~$240-$300 range.

• Some more bullish firms have targets around ~$300.

• Risks exist: slower profit growth, margin pressure, macro/headwinds.

• The recent cloud/AI infrastructure deal (Amazon + OpenAI) is a potential tailwind — helps the bullish case.

Scenario framework

Here are three scenarios: Bull, Base, and Bear. I assign probabilities based on how plausible each seems given current evidence and risks.

Why These Probabilities

Bull (20-30%): Because while the upside to ~$300 is cited by bullish analysts (e.g., ~$300 target raised per some notes). But achieving that requires many things to go very well (execution + favourable environment). So the probability is meaningful but not high.

Base (50-60%): Most analysts’ median targets sit in the ~$240-$270 range. That aligns with the base case. Given current fundamentals, this is the most likely band.

Bear (15-25%): There’s real risk if AWS growth slows, AI investments don’t monetise quickly, or macro/valuation shocks hit. So a (relatively) low but non-trivial chance of under-performance.

Additional Considerations

Upside drivers: The recent deal with OpenAI (via AWS) and backing of infrastructure could tilt in favour of the bull case.

Downside risks: High capital expenditures (e.g., AWS data centres), competition in cloud/AI, regulatory/antitrust or margin pressures.

Valuation: Current analyst targets reflect only modest upside from current levels; hence the base scenario is dominating.

Macro: Interest rates, economic growth, consumer spending all impact Amazon’s retail + ad + cloud businesses.

In the following section, we would like to share our modeled AMZN end-2025 price distribution based on three scenarios ($300, $250, $220) with assigned probabilities and expected returns.

Scenario Table (Already Calculated)

Expected Return

~+2.88% blended return into end-2025.

Market currently prices AMZN for moderate upside, with strong skew toward holding its current valuation range unless AI/cloud re-acceleration kicks in.

Chart Explanation

• Bull case = solid upside if AWS AI spending & monetization outperform.

• Base case = “steady execution” with modest gains (fits analyst consensus).

• Bear case = risk of slower cloud margins + macro drag.

Interpretation

Current positioning = market expects gradual fundamental improvement, not parabolic AI boom.

The probability-adjusted path favors grinding higher rather than explosive AI rally.

To break meaningfully above $300, Amazon needs:

• AWS AI workloads inflecting upwards (OpenAI partnership payoff)

• Ads & retail efficiencies hitting scale

• Market sentiment reset to “AI infra gold rush reborn”

Investment Takeaway

$300 by end-2025 = achievable but needs catalysts, not base case.

Risk-reward still positive, with large optionality from AI capex cycle.

DCA or cash-secured puts remain smart if bullish long-term.

In the next section, we will like to share the options overlay probability tables and volatility-adjusted expected price bands for AMZN into end-2025, based on:

• Spot ≈ $249.32

• Time horizon ≈ 14 months (~1.16 yrs)

• Assumed IV ≈ 30%

• Risk-free rate ≈ 4%

Options Overlay: Cash-Secured Put Probabilities

Interpretation

• Selling $210 put = safest; ~70% chance to keep full premium.

• Selling $225 = moderate risk/return profile.

• Selling $240 = nearly coin-flip expiring OTM — more premium but gets exercised almost half the time.

This helps an investor decide where to write puts depending on risk tolerance and desire to accumulate AMZN shares.

Volatility-Adjusted Price Distribution (End-2025)

Key Takeaways

1-sigma range (~68% probability): ~$179 → $342

Broad distribution implies high dispersion — classic AI-cycle risk/reward profile.

Meaningful tail upside: If AWS AI & OpenAI synergy deliver, $340-$475 becomes statistically plausible, not fantasy.

Strategy Insights

Use rolling 30–60D expiries in a wheel strategy for optimal theta decay.

Summary

Amazon's stock experienced a dip on the provided date, reportedly losing over 1.6% (closing at $249.46 on November 4th, per financial data, though other reports showed a surge on November 3rd/4th due to the deal). This occurred amidst broader tech sell-off and recurring AI bubble fears.

However, the major news is the $38 billion, seven-year deal between Amazon Web Services (AWS) and OpenAI. This agreement has OpenAI paying to use AWS's cloud infrastructure, including access to hundreds of thousands of Nvidia GPUs, to train and run its AI models like ChatGPT.

Impact on Amazon: The deal is a huge win for AWS, validating its position and adding a projected $5.5 billion in annual high-margin revenue, which analysts view as a material upside and a significant endorsement of Amazon's infrastructure capabilities. Following the initial announcement, Amazon's stock surged (gaining around 4-5% on the preceding trading day).

Market Outlook: The deal, part of a flurry of massive infrastructure commitments by OpenAI, reignites optimism in the AI-driven bull run, fueled by the "Magnificent Seven" tech giants. However, the fear of an AI bubble remains, with critics citing the large spending relative to current AI revenue, which could potentially end the rally if market sentiment shifts.

Amazon's $300 Target: Analysts are generally bullish on Amazon due to AWS growth and AI positioning, with several price targets in the $290-$340 range, suggesting a move to $300 by the end of 2025 is plausible if the AI momentum and AWS performance continue.

Appreciate if you could share your thoughts in the comment section whether you think AMZN $300 target by end of 2025 is a possibility and option trading might be a good way to take advantage.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.