Amazon Stock Climbs (AMZN): Price Target Raised Ahead of Earnings

Amazon.com’s stock edged 0.22% higher to $239.68 in early US trading today, as Roth Capital lifted its price target on the e-commerce and cloud computing giant, citing underappreciated margin improvements and emerging artificial intelligence catalysts ahead of the company’s fourth-quarter earnings report next week.

Roth Capital analyst Rohit Kulkarni increased the firm’s price target on Amazon to $295 from $270, maintaining a Buy rating on the shares.

The analyst told investors that markets are underestimating the margin relief stemming from layoffs conducted in the fourth quarter, along with the likelihood of additional workforce reductions in the first quarter of fiscal year 2026. Kulkarni positioned Amazon as the firm’s top Mega Cap pick for the first half of 2026, highlighting near-term catalysts including the launch of Trainium 3, the impact of Rufus on commerce conversions, and greater clarity on the AWS-OpenAI relationship that could reshape the AI narrative surrounding the stock.

The upgrade comes amid a wave of bullish sentiment from Wall Street analysts, with at least a dozen major firms raising their price targets on Amazon shares in recent months. The consensus centers on two key themes: operational efficiency driving margin expansion and accelerating growth in Amazon Web Services, particularly in AI-related infrastructure and services.

AWS: The Cloud Growth Engine

AWS has emerged as a central pillar of the investment thesis. The cloud division posted 20% growth in the third quarter of 2025 on a foreign-exchange neutral basis, marking its highest growth rate since 2022 and representing an acceleration from 17% in the first half of the year. Multiple analysts project AWS growth could reach the mid-20% range in 2026, driven by capacity expansion plans that aim to double AWS infrastructure by 2027. This aggressive buildout positions Amazon to capitalize on surging demand for AI compute resources and cloud services.

Morgan Stanley leads the Street with a $315 price target, maintaining an Overweight rating following better-than-expected third-quarter results. The firm emphasized that AWS’s 20% year-over-year acceleration demonstrates how revisions trump narrative in the current AI-focused market environment.

Jefferies raised its target to $300, citing AWS momentum and noting that Amazon trades at an attractive 12 times projected 2026 EV/EBITDA. Oppenheimer set a $305 target, pointing to the potential for a 14% to 22% increase in AWS revenue by 2027 as capacity doubles.

Retail Resilience and Margin Expansion

Beyond the cloud business, analysts highlighted improving fundamentals across Amazon’s retail operations. Jefferies noted that 47% of surveyed consumers maintained spending levels on the platform over the past three months, with 15% increasing their outlays despite inflationary pressures. This consumer resilience supports Amazon’s solid 10% year-over-year revenue growth, which reached $691.33 billion over the trailing twelve months.

Margin expansion represents another critical driver of the upgraded outlook. Wedbush raised its price target to $250, pointing to encouraging US retail data, strong advertiser sentiment, robust AWS demand, and ongoing efficiency gains that could push margin expectations higher. UBS increased its target to $271, reflecting reduced concerns over tariff-driven demand destruction and raising Gross Merchandise Value and gross profit projections by approximately 2% for 2026 and 2027.

The Evolving AI Narrative

The AI narrative continues to evolve as a key differentiator for Amazon. Goldman Sachs reiterated its Buy recommendation with a $275 price target, emphasizing that AWS’s growth and profit potential remain underappreciated by markets. The firm forecasts a return to over 20% revenue growth with sustained operating margins in the low-to-mid-30% range through 2025 and 2026. Cantor Fitzgerald highlighted Amazon as a top pick to capitalize on accelerating AI deployment, noting a healthy fundamental backdrop with innovation accelerating across AI, autonomous vehicles, robotics, and quantum computing.

Wells Fargo’s $295 price target reflects confidence in management’s expectation to double AWS capacity by 2027, which could support multi-quarter revenue acceleration for the cloud business. Stifel matched that target following third-quarter results, noting that AWS showed greater quarter-over-quarter acceleration than competitors Microsoft Azure and Google Cloud Platform, reversing the pattern observed in the second quarter.

Benchmark also set a $295 price target, maintaining a Buy rating despite ongoing investments in data centers and satellite launches that continue to affect free cash flow. The firm expressed confidence in Amazon’s business trajectory, particularly as AWS achieved 20% growth earlier than anticipated.

All eyes now turn to Amazon’s fourth-quarter earnings report scheduled for next week, where management commentary on margin trends, AWS growth trajectory, and AI initiatives will likely determine whether the stock can sustain its momentum toward the Street’s elevated price targets.