Wall Street Bets Big on Amazon’s Resurgence

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Financial analysts are entering 2026 with a strong consensus on Amazon, naming it a top investment choice despite its lackluster performance in the previous year. Multiple leading investment banks project share price appreciation between 30% and 50%, citing a re-accelerating AWS, promising returns on AI investments, and the enduring robustness of the company's overall business model.

Amazon's stock significantly underperformed in 2025, gaining a mere 6% compared to the S&P 500's 18% advance. It was the worst performer among the so-called "Magnificent Seven" tech stocks, a period during which Alphabet's shares surged 66%. The pressure came from a slowdown in AWS growth and market skepticism over whether the company's substantial artificial intelligence investments would bear fruit. Investor uncertainty was further heightened by Amazon's October announcement of 14,000 job cuts.

Analyst Consensus Points to Substantial Upside

Market experts see considerable room for the equity to catch up. Evercore ISI's Mark Mahaney believes the shares possess roughly 50% upside potential. His thesis centers on several key drivers: AWS growth is re-accelerating, the new Trainium AI chips are experiencing robust demand, the advertising business continues to perform well, and the new Alexa+ assistant is gaining momentum.

Mahaney particularly emphasizes Amazon's fundamental quality, noting the company is growing earnings per share at 25%, expanding margins, and is positioned to significantly increase free cash flow within the next 24 months.

RBC Capital analysts position Amazon as "best-in-class" for returns on AI infrastructure investments. Analyst Brad Erickson points to AWS's structural advantages, highlighting that the cloud division has the broadest revenue base among hyperscalers and operates with the most capital expenditure discipline. His analysis suggests Amazon is likely to see faster returns on these investments than rivals Alphabet and Meta.

Additional bullish sentiment comes from JPMorgan's Doug Anmuth, who highlighted Amazon's seven-year, $38 billion deal with OpenAI as a potential catalyst for additional revenue growth. Wells Fargo raised its price target to $295, while Oppenheimer lifted its target to $305.

Legal Challenge Over Pandemic Pricing Advances

In a separate development, a Seattle court ruled on January 5 that a consumer class-action lawsuit against Amazon may proceed. The suit alleges the company inflated prices during the pandemic, in some cases by several hundred percent on items like pain relievers, toilet paper, and protective masks. Amazon has not yet commented publicly on the court's decision.

Fourth-Quarter Earnings in the Spotlight

All eyes are on Amazon's upcoming financial release for the fourth quarter of 2025, scheduled for January 29. Analysts anticipate earnings per share of $1.95 on revenue of $211 billion. A critical focus will be on AWS, which in Q3 increased its growth rate to 20.2%—the strongest expansion in eleven quarters. The advertising segment also showed strength, growing 22% to $17.6 billion.

Looking ahead to the full 2026 fiscal year, analysts project earnings per share of $7.86, which would represent an 11% increase. Total revenue is expected to climb to approximately $794 billion.