Over the next two years, Amazon Web Services is anticipated to add 15 gigawatts of capacity.
Because of their funding techniques and competitive stance, investors are skeptical about Amazon.com and Oracle’s use of artificial intelligence.
However, according to Deutsche Bank, these two businesses are crucial to the enormous expansion of AI infrastructure, so that could soon alter.
The bank listed Amazon (AMZN) and Oracle (ORCL) as high-conviction choices in its most recent “Fresh Money” report for the first quarter of 2026, which aggregated experts’ top investment ideas.
Amazon hasn’t been able to completely persuade investors of its AI promise despite expanding capacity, speeding cloud expansion, and announcing deals with OpenAI. In 2025, the company’s shares only increased by 5%, while the S&P 500’s SPX saw a 16% growth.
According to analyst Lee Horowitz, who wrote on Friday that Amazon Web Services might add 15 gigawatts of capacity over the next two years, the “AI ‘loser’ overhang” over Amazon’s stock is expected to dissipate this year. According to Horowitz, the recent OpenAI transaction “barely scratches the surface,” and this capacity expansion will help AWS’s revenue growth pick up speed again.
According to Horowitz, Amazon’s e-commerce division “remains a well-oiled machine” that generates steady revenue growth and gains worldwide market share in a retail sector that is experiencing moderate development. Margin expansion is being driven by improvements in delivery efficiency, and Rufus, Amazon’s shopping assistant, may be a hidden weapon. According to Horowitz, Rufus is already generating an additional $10 billion in income.
“We believe investors can comfortably underwrite 20% operating income growth for Amazon going forward,” Horowitz stated.
Justin Post, a Bank of America analyst, ranked Amazon as a top selection for 2026 earlier this week and emphasized how Rufus may help Amazon take the lead in agentic purchasing.
Although investor interest in Oracle’s stock surged in September due to reports of its AI deal pipeline, initial excitement waned due to worries about the company’s debt levels and financing strategies. Since their peak in September, Oracle’s stock has dropped more than 40%.
In order to allay investor concerns over the stock, Deutsche Bank analyst Brad Zelnick anticipates that Oracle would offer “financing clarity” in the upcoming quarters. However, given that Oracle’s potential contract value has increased to roughly $500 billion from $65 billion just two years ago, Zelnick feels that financial concerns are overshadowing the company’s leading role in developing AI infrastructure.
Because of its extensive experience with parallel computing and high-speed processing, Zelnick thinks Oracle has a clear advantage when it comes to installing clusters of AI chips.
“Underappreciated” by investors is Oracle’s traditional cloud business, Zelnick added. He pointed out that throughout the past two years, the non-AI segment has expanded by about 40%, gaining market share from bigger cloud competitors in the process.
