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Analyst Downgrades Amazon, Microsoft Amid Rising AI Costs

11/19/2025

Summary

Story summary

Rothschild & Co Redburn downgraded Amazon and Microsoft to neutral from buy, indicating a change in outlook for both companies.
Analyst Alex Haissl stated that generative AI development costs are now six times higher than previously estimated, impacting economic viability.
Although Amazon's AWS is better positioned than Microsoft's Azure, both firms need to show sustained growth and cost reduction to improve their outlook.
Price targets are set at $250 for Amazon and $500 for Microsoft.

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Story summary

Rothschild & Co Redburn downgraded Amazon and Microsoft to neutral from buy, indicating a change in outlook for both companies.
Analyst Alex Haissl stated that generative AI development costs are now six times higher than previously estimated, impacting economic viability.
Although Amazon's AWS is better positioned than Microsoft's Azure, both firms need to show sustained growth and cost reduction to improve their outlook.
Price targets are set at $250 for Amazon and $500 for Microsoft.