Analysts See Renewed Momentum for Amazon Shares in 2026

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Following a period of relative underperformance in 2025, Amazon is attracting renewed scrutiny from market strategists. Confidence is building around the trajectory of its cloud division, AWS, and the company's valuation for the coming year. However, significant capital expenditures and ventures like autonomous mobility continue to be key areas for investor evaluation as the market questions whether profit growth can truly accelerate.

Financial analysts at Jefferies have updated their assessment of Amazon, highlighting what they view as an attractive valuation following its 2025 weakness. They point to a 2026 enterprise value to EBITDA multiple of approximately 12x. Concurrently, the firm anticipates an improvement in overall profitability.

Key projections include:
* An operating margin of 11.2% for 2025.
* An expected operating margin expansion to 12.3% for 2026.
* A deceleration in total revenue growth from roughly 12% in 2025 to about 10% in 2026.

Jefferies suggests that despite a moderating top-line growth rate, profitability should strengthen due to an increasing revenue mix shift toward higher-margin cloud services. This trend indicates that the company's substantial investments in infrastructure and artificial intelligence are beginning to translate into improved margins.

The Central Role of AWS Growth

The investment thesis is heavily driven by the accelerating performance of Amazon Web Services. According to Jefferies' analysis, AWS revenue growth picked up from 17% in the first half of 2025 to 20% in the third quarter. For 2026, growth is forecast to reach the "mid-20-percent range."

The analysts present a nuanced view on AI competition. While public perception may place Amazon behind Microsoft and Google in the artificial intelligence race, Jefferies argues the market is shifting from a phase focused on "model training" to one centered on deploying productive AI applications. This "inference" stage requires powerful, scalable infrastructure—a domain where AWS is seen as particularly well-positioned to capitalize.

Broader Analyst Sentiment and AI in Commerce

Other research firms echo a positive outlook. Evercore ISI reaffirmed a bullish stance on Monday, maintaining a price target of $335 per share. Their focus rests on the application of AI within Amazon's core commerce business.

They highlighted the potential of the AI-powered shopping assistant "Rufus." This tool is designed to enhance conversion rates on the online platform, thereby boosting sales efficiency. Evercore sees this initiative providing additional levers for revenue and profit growth in the retail segment over the coming quarters.

Challenges in Autonomous Ambitions

Amazon's autonomous vehicle subsidiary, Zoox, remains an area of scrutiny. On December 23, 2025, the US National Highway Traffic Safety Administration (NHTSA) confirmed a recall of 332 vehicles due to a software flaw in the automated driving system that could cause unexpected braking.

Although the recall involves a limited number of units, it underscores the ongoing technical and regulatory hurdles within the autonomous driving sector. For shareholders, it represents another factor to consider when evaluating Amazon's ambitions beyond its primary operations.

From 2025 Laggard to 2026 Potential

Within the market context of 2025, Amazon's equity significantly trailed the broader US benchmark. Jefferies notes the shares gained only 5% last year, compared to a 16% rise for the S&P 500. Many investors adopted a cautious stance toward the heavy investments in AI and cloud infrastructure, which lacked immediately visible profit contributions.

Some market experts now view Amazon as a laggard with catch-up potential among the "Magnificent 7" cohort for 2026. The divergent paths of its cyclical retail business and its high-growth cloud unit remain central to the narrative. While commerce continues to face macroeconomic pressures, the approximate 20% growth rate at AWS signals renewed momentum and potential market share recapture. The investment focus is also shifting more toward margin efficiency rather than pure revenue expansion, aligning with the heightened emphasis on profitability in the technology sector.

Upcoming Catalysts and Share Performance

Attention now turns to the next quarterly report due in late January, which will encompass the critical holiday shopping period. Key items for scrutiny will be:
* Confirmed growth metrics for AWS.
* Guidance on the capital expenditure budget for 2026.
* Indicators regarding further margin progression across the company.

The stock currently trades around $226. With several major brokerages issuing buy recommendations and price targets in the $300 range or above, the near-term trajectory will largely depend on whether the accelerating cloud narrative and anticipated margin improvement are substantiated in the year's first financial results.