Amazon.com, Inc.

(NASDAQ Global Select)
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Bullish +65

Here's what would it take for an Amazon stock comeback in 2026

AI-generated analysis

πŸ“ˆ Amazon stock gained only 6% year-to-date in 2025, trailing the S&P 500's 18% gain and underperforming mega-cap tech peers.

πŸš€ AWS reaccelerated to 20% revenue growth in Q3 2025, its fastest clip since 2022, driving bullish sentiment for 2026.

πŸ’° TD Cowen named Amazon a top pick for 2026 with a price target of $275 and a buy-equivalent rating.

πŸ“Ί Advertising is highlighted as an underappreciated high-margin segment boosted by Prime Video's live sports rights expansion.

πŸ›’ Retail strategy includes same-day perishable delivery in over 2,300 cities and free grocery delivery on orders over $25.

⚑ Amazon plans to double data center capacity through 2027 to meet AI infrastructure demand.

⚠️ The ramp-up of new capacity hinges on solving critical power availability constraints.

πŸ“‰ Concerns about tariffs and competition from Microsoft Azure and Google Cloud previously weighed on sentiment.

Bullish Signals
  • AWS reaccelerated to 20% revenue growth in the third quarter, its fastest pace since 2022, signaling a strong recovery in the company's primary profit engine.
  • Analysts at TD Cowen named Amazon their top mega-cap internet pick for 2026, citing sustained AWS growth and strengthening advertising momentum as key drivers.
  • Amazon's ad business is expected to gain significant lift from Prime Video's expanding slate of live sports rights, including Thursday Night Football and NFL playoff games.
  • The company introduced free same-day grocery delivery on orders over $25, pushing incrementally closer to Walmart while deepening Prime membership value.
  • Amazon plans to double its data center capacity through 2027 to meet growing demand for AI infrastructure.
Risk Factors
  • Amazon shares have gained only 6% year-to-date, significantly trailing the S&P 500's nearly 18% gain and underperforming mega-cap tech peers.
  • Wall Street worries persist regarding cloud growth relative to Microsoft Azure and Google Cloud, which could cap future expansion if AWS cannot maintain its lead.
  • President Donald Trump's tariffs are expected to pressure already-thin retail margins, potentially weighing on overall profitability.
  • The ramp-up of new data center capacity hinges on solving power availability constraints, a risk that previously capped cloud growth in the past.
Full Analysis
Amazon stock is positioned for a potential recovery in 2026 after underperforming its peers and the broader S&P 500 in 2025, gaining only 6% year-to-date compared to an 18% gain for the index. Wall Street concerns regarding cloud growth relative to Microsoft Azure and Google Cloud, alongside tariff impacts on retail margins, weighed heavily on sentiment throughout the year. Analysts from TD Cowen have identified Amazon as a top mega-cap internet pick for 2026, citing reaccelerated AWS growth, strengthening e-commerce and advertising momentum, and ongoing margin expansion as primary drivers. The company's cloud computing business, Amazon Web Services (AWS), reaccelerated to 20% revenue growth in the third quarter, marking its fastest pace since 2022. This resurgence is central to the bullish outlook for 2026, with analysts highlighting advertising as an underappreciated high-margin segment poised for further lift from Prime Video's expanding live sports rights, including Thursday Night Football and NFL playoff games. On the retail front, Amazon continues to deepen Prime membership value through expanded same-day delivery for perishables in over 2,300 cities and the introduction of free same-day grocery delivery on orders over $25. The core determinant for a meaningful stock recovery remains AWS's ability to bring AI infrastructure online fast enough to meet surging demand. Amazon plans to double its data center capacity through 2027, but this expansion hinges on resolving power availability constraints that previously capped growth. If the company can demonstrate consistent capacity conditions and maintain momentum in cloud, ads, and retail efficiency, 2026 could mark a significant rebound for the stock, with analysts maintaining a buy-equivalent rating and a price target of $275 per share.