Amazon Stock Emerges as a Leading Investment Choice for 2026

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As Wall Street sets its sights on the coming year, Amazon has been highlighted as a premier investment opportunity. The technology behemoth has been named the "Top Mega Cap Pick" for 2026 by investment bank TD Cowen, with analysts pointing to significant potential for share price appreciation. Despite a sluggish performance year-to-date, experts are betting on an acceleration in its cloud computing division and an advertising business they believe is undervalued.

The company's share price has yet to reflect its underlying operational strength in 2025. Since the start of the year, the stock has declined by more than 8 percent, underperforming broader market expectations.

• Previous Close (Thursday): €196.14
• 7-Day Change: -0.49%
• Year-to-Date (YTD): -8.60%
• 52-Week High: €233.20
• Distance from 52-Week High: -15.89%

For the current fourth quarter, Amazon has provided net sales guidance ranging from $206 billion to $213 billion, representing growth of 10 to 13 percent. Investors are awaiting the next quarterly results, scheduled for release in late January 2026, to assess whether projected improvements are materializing.

Analyst Confidence and Key Growth Engines

TD Cowen analyst John Blackledge has reaffirmed his Buy rating on Amazon, establishing a price target of $300. This target suggests an upside of approximately 30 percent from current levels. The firm's optimism is rooted in three primary catalysts expected to define Amazon's trajectory in 2026.

A central pillar of this bullish outlook is Amazon Web Services (AWS). Blackledge forecasts a revenue re-acceleration beginning in Q4 2025, a trend anticipated to persist over the following two years. Driven by robust demand for artificial intelligence infrastructure, the analyst projects 2026 revenue and operating income figures that will notably exceed current market consensus.

Concurrently, Amazon's advertising segment is gaining increased attention. TD Cowen describes this business as "underestimated," anticipating it will sustain high double-digit growth rates. Prime Video is seen as a critical component here, having nearly closed the gap with market leader Netflix—Prime Video's user penetration stands at 57.8 percent versus Netflix's 58.0 percent. Advertising revenue could reach $68 billion as early as 2025, potentially contributing up to 35 percent of total operating profit.

Strategic Expansion in Grocery Retail

Alongside analyst praise, Amazon is aggressively expanding its physical retail footprint. The company has significantly scaled its same-day grocery delivery service for fresh items, now covering over 2,300 U.S. cities. This marks a major expansion since the service's launch in August 2025, when it was available in roughly 1,000 cities.

This strategy is proving effective: in serviced areas, sales of perishable goods have multiplied by 30 times since January. Fresh products now dominate same-day delivery orders. Furthermore, according to media reports, Amazon is piloting a new pickup service that consolidates online orders and in-store purchases into a single "Unified Order" for customer collection within one hour.

Regulatory Hurdles in Europe

Despite these operational advances, the company faces ongoing challenges. On December 10, Amazon settled a protracted tax dispute in Italy, paying €510 million to local authorities. While this resolves tax matters for the period spanning 2019 to 2021, the company has issued sharp criticism of Italy's regulatory climate, warning that it could diminish the region's appeal for future corporate investment.

The coming year will be a crucial test of whether the anticipated acceleration in AWS, fueled by AI adoption, and the continued rise of its advertising arm can deliver the growth that has positioned Amazon as a top pick for 2026.