Amazon Stock Poised for a Major Rebound in 2026

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A consensus of bullish sentiment is building on Wall Street as the calendar turns, with prominent investment banks positioning Amazon as a top investment choice for the coming year. This optimism emerges despite the tech giant's relative underperformance throughout much of 2025, where it lagged behind both the broader S&P 500 index and rival "Magnificent Seven" members like Alphabet.

The professional investment community is overwhelmingly positive. A striking 96% of covering analysts currently recommend buying Amazon shares, with a consensus price target averaging $295. Leading the charge, Evercore ISI has named Amazon its premier "Top Pick" among internet equities for 2026. The firm's analyst, Mark Mahaney, projects a potential share price appreciation of approximately 50%, citing several key drivers.

This bullish outlook is echoed by JPMorgan, which forecasts a more conservative but still significant 30% upside. Both firms highlight a recent, pivotal $38 billion agreement with OpenAI, structured over seven years, as a major catalyst expected to provide substantial support for Amazon's cloud division.

Diagnosing the 2025 Lag

Amazon's position at the rear of the market's leaders this year can be attributed to three primary investor concerns:
* A noticeable deceleration in revenue growth within its critical Amazon Web Services (AWS) cloud segment.
* Market uncertainty regarding the timeline for monetizing the company's substantial artificial intelligence investments.
* A significant workforce reduction of 14,000 employees in October, which was interpreted by some as a signal of internal efficiency challenges.

These factors contributed to a stark performance gap. While Alphabet's stock surged 66% amid AI-driven enthusiasm, Amazon's trajectory was far more subdued.

The Core Thesis: AWS Bottlenecks, Not Demand Issues

Analysts constructing the bullish case point to a crucial, often-overlooked nuance in the AWS narrative. The current growth moderation is not due to a lack of customer demand but rather to infrastructure capacity constraints. The division's order book is reportedly full. Industry experts suggest that once these supply bottlenecks are resolved, AWS revenue growth is poised to re-accelerate sharply.

Further strengthening the investment thesis is the robust performance of Amazon's advertising business and high demand for its proprietary "Trainium" AI chips, which are central to its cloud AI services.

A Divergence in Sentiment

An interesting dichotomy exists between institutional and retail investor perspectives. While professional money managers are building substantial positions in anticipation of a rebound, data from platforms like Polymarket indicates that smaller, individual investors remain skeptical, expecting limited near-term movement. This perception gap is likely to close if Amazon's upcoming quarterly earnings reports provide clear evidence that the AWS capacity issues are firmly in the past, unlocking the segment's pent-up growth potential.