This article first appeared on GuruFocus.

KeyBanc Capital Markets said Amazon (AMZN, Financials) shares could climb more than 30% from current levels as investors continue to underestimate the company’s expanding artificial intelligence capabilities. The brokerage maintained its Overweight rating and set a $250 price target, citing momentum in Amazon Web Services and the company’s growing role in AI infrastructure.

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The company said that Amazon’s AI narrative is bigger than most investors think. AWS has become a major source of processing capacity for other AI companies, in addition to making generative AI tools for consumers. Experts say that as businesses use AI more and more in their daily operations, the need for cloud-based training and inference workloads will grow.

KeyBanc also pointed to advertising as a strong contributor to future growth. Amazon’s ad business, which already exceeds $50 billion in annual revenue, is expected to benefit from new AI-based recommendation and targeting systems that increase efficiency and return on investment for marketers.

The note follows a series of bullish calls across the tech sector after strong quarterly results from several AI-linked companies. Amazon shares have risen about 45% so far in 2025, outperforming both the Nasdaq Composite and several large-cap peers.

KeyBanc said the next catalysts for Amazon include updates from AWS’s re:Invent conference and new disclosures on AI-driven retail and logistics initiatives.