Amazon Poised for 2026 Comeback with 20% AWS Revenue Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: Fool
- AWS Growth Momentum: Amazon Web Services (AWS) achieved a 20% year-over-year revenue increase in Q3, marking its fastest growth rate in years, indicating a strengthening leadership position in the cloud computing market that will enhance overall profitability.
- Advertising Services Boosting Profits: Amazon's advertising services generated $17.7 billion in revenue in Q3, potentially yielding $5.3 billion in operating profits, highlighting the critical role of advertising in overall profitability and setting the stage for strong growth in 2026.
- Valuation Advantage: Amazon's price-to-earnings ratio is now in line with peers, allowing its stock price to fluctuate in tandem with business performance, with analysts projecting an 11% sales growth in 2026, presenting a favorable investment opportunity for shareholders.
- Future Outlook: Should AWS and advertising services continue to perform well, Amazon's operating profit growth is expected to outpace revenue growth, potentially leading to stock outperformance; conversely, failure to achieve this could result in another disappointing year for shareholders.
Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AMZN is 294.71 USD with a low forecast of 250.00 USD and a high forecast of 340.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
43 Analyst Rating
40 Buy
3 Hold
0 Sell
Strong Buy
Current: 232.530
Low
250.00
Averages
294.71
High
340.00
Current: 232.530
Low
250.00
Averages
294.71
High
340.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
