TLDR
- Roth Capital raised Amazon’s price target to $295 from $270 ahead of Q4 earnings, naming it their top Mega Cap pick for first half of 2026.
- Analysts believe the market is underestimating margin relief from Q4 layoffs and potential additional Q1 workforce reductions.
- AWS grew 20% in Q3 2025, the fastest rate since 2022, with analysts projecting mid-20% growth in 2026 as Amazon doubles cloud infrastructure by 2027.
- At least a dozen Wall Street firms raised price targets recently, with targets ranging from $250 to $315, citing operational efficiency and AI growth.
- Near-term catalysts include Trainium 3 chip launch, Rufus AI shopping assistant impact on sales conversions, and clearer details on AWS-OpenAI partnership.
Amazon shares climbed 0.22% to $239.68 in early trading as Wall Street continues piling on bullish price target increases. Roth Capital became the latest firm to raise expectations, lifting its target from $270 to $295.
The move comes just days before Amazon reports fourth-quarter earnings next week. Analyst Rohit Kulkarni told investors the market isn’t fully pricing in margin improvements from recent cost cuts.
Amazon conducted layoffs in the fourth quarter of 2025. Kulkarni expects more workforce reductions in the first quarter of 2026. These cuts should boost profit margins more than current estimates reflect.
Roth Capital named Amazon its top Mega Cap pick for the first half of 2026. The firm sees several near-term events that could reshape how investors view the stock’s AI potential.
The Trainium 3 chip launch represents one catalyst. Amazon developed these custom AI processors to compete with Nvidia’s dominant position in the market.
Rufus, Amazon’s AI shopping assistant, could also move the needle. The tool aims to improve how customers find and buy products on the platform. Better conversion rates would directly boost revenue.
Cloud Computing Powers Growth Expectations
AWS posted 20% growth in the third quarter on a foreign-exchange neutral basis. That marked the cloud division’s fastest expansion since 2022.
The growth rate accelerated from 17% in the first half of 2025. Multiple analysts now project AWS could hit mid-20% growth rates in 2026.
Amazon plans to double AWS infrastructure by 2027. This buildout positions the company to capture demand for AI compute resources and cloud services.
Morgan Stanley leads Wall Street with a $315 price target. The firm emphasized that AWS’s growth acceleration proves performance beats narrative in today’s AI-focused market.
Jefferies raised its target to $300, noting Amazon trades at an attractive 12 times projected 2026 EV/EBITDA. Oppenheimer set a $305 target based on capacity expansion plans.
At least a dozen major firms boosted their Amazon price targets in recent months. The consensus centers on two themes: operational efficiency driving margin expansion and accelerating AWS growth.
Retail Business Shows Resilience
Amazon’s retail operations continue performing well despite economic pressures. Jefferies found that 47% of surveyed consumers maintained spending levels over the past three months. Another 15% increased their outlays despite inflation.
This consumer behavior supports Amazon’s 10% year-over-year revenue growth. The company generated $691.33 billion over the trailing twelve months.
Wedbush raised its price target to $250, citing encouraging US retail data and strong advertiser sentiment. The firm also pointed to ongoing efficiency gains that could push margins higher.
UBS increased its target to $271. The firm reduced concerns about tariff-driven demand issues and raised Gross Merchandise Value projections by roughly 2% for 2026 and 2027.
Wells Fargo set a $295 price target based on confidence in management’s capacity expansion plans. Doubling AWS infrastructure could support multi-quarter revenue acceleration for the cloud business.
Stifel matched that $295 target after third-quarter results showed AWS outpacing Microsoft Azure and Google Cloud Platform in quarter-over-quarter acceleration. This reversed the pattern from the second quarter.
Benchmark also set a $295 price target while maintaining a Buy rating. The firm acknowledged ongoing investments in data centers and satellite launches continue affecting free cash flow. However, Benchmark expressed confidence in Amazon’s trajectory as AWS hit 20% growth earlier than expected.
Goldman Sachs reiterated its Buy recommendation with a $275 price target. The firm believes AWS’s growth and profit potential remain underappreciated, forecasting a return to over 20% revenue growth with operating margins in the low-to-mid-30% range through 2026.
Cantor Fitzgerald highlighted Amazon as a top pick for AI deployment acceleration. The firm noted innovation speeding up across AI, autonomous vehicles, robotics, and quantum computing.
Greater clarity on the AWS-OpenAI relationship could also shift sentiment. Details about this partnership may emerge around the earnings report next week.
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