Amazon (AMZN) Stock Forecast & Price Target

Amazon.com is supported by a durable mix of scale leadership in e-commerce, a growing advertising platform, and AWS-driven cloud demand that continues to accelerate, with 3Q AWS revenue up 39.3% y/y to about $46.0BN and operating income up 55.4% y/y. Its operating leverage is improving, as 3Q GAAP operating income reached $28.1BN, 7% above consensus, while gross margin expanded to 53.3% and AWS operating margin rose to 38.7% on stronger AI and core workloads. The positive outlook is further reinforced by a $578BN AWS backlog, management’s expectation for 40%+ AWS revenue growth in '27 and '28, and Amazon’s structural logistics advantages that should keep driving retail share gains and margin expansion.

Amazon.com is facing a weakening operating backdrop as 3Q26 advertising revenue of $19.6 billion rose just 10.9% y/y and came in about 6% below estimates, while FX-neutral growth decelerated to 12% from 26% in 2Q26. The 850 bps hit from Prime Day shifting out of 3Q26 highlights how sensitive its growth is to timing effects, and it raises concern that eCommerce demand could soften further while the company is still committing heavy investment. On top of that, AWS faces increasing competitive pressure from Google and Microsoft, and persistent spending, regulatory risk, succession risk, and potential retail share losses could keep margin expansion limited over time.