Why AI agents won't kill, but will make Amazon an AI beneficiary: Needham names 5 reasons

While Wall Street fears that the development of AI agents could negatively affect Amazon's business, Needham analyst Laura Martin is convinced of the opposite. In her opinion, the online commerce giant, on the contrary, has every chance to become one of the most successful companies on the market in the AI era, MarketWatch writes.

Wall Street fears that AI agents (AI tools that are installed on a user's personal device and can perform tasks for them) will allow users to shop around familiar online venues, Martin pointed out in her memo, MarketWatch writes. A query to them, like, "Find and buy the best running shoes under $150," would theoretically instantly give a consumer access to the entire range of products online, without having to search for something specific on Amazon or any other marketplace. Despite this, however, Needham's analyst believes Amazon will not only protect its market share, but also use AI as a powerful lever to grow revenue and margins.

The analyst maintains a "buy" rating on Amazon shares with a target price of $265 per paper, Barron's writes. This suggests the potential for their growth of about 26% relative to the closing level on Wednesday, March 18.

Among the drivers of Amazon's growth in the AI era, Martin cited, among others:

- The company's cloud business infrastructure is AWS. AI companies with large language models will pay Amazon Web Services (AWS) for access to unique consumer data, she said. Martin believes AWS, through its ability to generate revenue from third-party customers, will diversify Amazon's revenue enough to offset the massive investment in AI. That's an advantage that other IT giants like Meta or OpenAI don't have, MarketWatch points out.

- Amazon's customer data: the company has the largest catalog of products, a fulfillment network, pricing information, reviews and purchase information, and a long history of relationships with sellers, the Needham strategist notes. All of which Amazon can use to increase revenue and improve profitability, she says.

- Martin also added that access to purchase history will give Amazon a head start on developing its own AI shopping assistant, Rufus. Amazon's AI agent is already increasing the average check and working to retain customers, MarketWatch specifies.

- Having its own chips is another reason Martin sees the company as having a unique pricing advantage in the AI era. Amazon executives said in February that Trainium 2 chips for AI training are already sold out, and Trainium 3 inventory is expected to be fully booked by the third quarter of 2026.

- Although Amazon's massive spending on AI has some investors worried - the company plans to spend a record $200 billion on AI in 2026, the highest among the "Magnificent Seven" companies - Laura Martin sees a long-term upside. In her opinion, the massive capital expenditures will only strengthen Amazon's position, as few can afford such a scale of investment, which makes the company virtually unattainable for competitors.

Martin also expects the company's operating margin to continue to grow as Amazon slows hiring and benefits from productivity gains from algorithms and robots.

The assessment of Amazon's prospects in the field of AI from analyst Needham sounded amid a marked decline in quotes, while Wall Street continues to focus on the potential risks to the company's business, notes Barron's. Since the beginning of the year, Amazon shares have slipped more than 9%, and their fall from the historic high of $254 per paper, recorded on November 3, 2025, has already amounted to about 20%. In trading on March 18, quotes of the company fell by another 2.5%.

However, despite the current volatility, Wall Street remains confident in Amazon's future. Of the 70 analysts tracking the company's securities, 64 recommend them to buy and only six advise to "hold" positions. The average target price of the company's securities for the next year is $280: this suggests the potential for their growth of more than 30% from the closing level on March 17.

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