Amazon. com shares experienced a 7% surge on Friday as the e-commerce giant reported better-than-expected sales for the holiday quarter. Its cloud business also showed promising gains from AI-powered features. Joining other tech firms like Microsoft, Amazon is beginning to reap the benefits of its heavy investments in AI, with plans for further spending in 2024 to develop this highly anticipated technology. J. P. Morgan's Doug Anmuth noted that Amazon Web Services (AWS) is also seeing significant early revenue growth from Generation AI, although it is still a small portion of their approximately $100 billion run-rate business. Anmuth expects AWS to see notable traction in Generation AI in the coming year. As a result, at least 23 brokerages raised their price targets on Amazon's stock. Despite a challenging economy, the online retail giant experienced a 14% increase in holiday quarter sales, demonstrating strong spending.

Anmuth believes that Amazon's adept execution and its ability to navigate challenges in both retail and AWS during the pandemic will strengthen the company moving forward. With a positive revenue forecast, shares of Amazon, which had already climbed 81% in 2023, were trading at $171. 01. Analysts were pleased with the revenue forecast, which exceeded expectations, with Amazon projecting current-quarter revenue to be as high as $143. 5 billion, compared to an expected $142. 13 billion. Jamie Meyers, a senior analyst at Laffer Tengler Investments, highlighted the contrast between other tech companies softening their revenue ranges and earnings per share targets, while Amazon provided a much higher-than-anticipated range. If gains hold, Amazon could add approximately $120 billion to its market capitalization. Despite significant investments in building cloud infrastructure to support the rapid adoption of generative AI technology, investors remain optimistic. Krishna Chintalapalli, a portfolio manager at shareholder Parnassus Investments, expressed confidence that recent generative AI investments will eventually yield strong returns. (Reporting by Aishwarya Venugopal and Akash Sriram in Bengaluru; Editing by Saumyadeb Chakrabarty and Sriraj Kalluvila)