Amazon Stock Is Still Slumping. Here's What Wall Street Is Saying About AI Growth.

Wall Street analysts are increasingly bullish on the growth prospects for Amazon’s closely-watched cloud business — but the positivity hasn’t helped Amazon (AMZN) break out of its 2026 slump.

Amazon stock is trading about 1% lower at 206.93 in recent action on the stock market today. Shares entered Friday trading about 10% lower year-to-date. The stock has hovered below Amazon’s 21-day moving average for the past three trading days.

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Shares of the tech giant are on track to close roughly flat for the week, despite receiving some upbeat commentary on Wall Street.

Evercore ISI analyst Mark Mahaney offered the latest positive view. In a client note late Thursday, Mahaney reiterated an outperform call and 285 price target for Amazon stock.

He called Amazon a DHQ, or dislocated high-quality opportunity. That’s because Amazon’s price-to-earnings multiple is near a three-year low. Meanwhile, he expects an “inflection point” this year, with revenue growth accelerating and operating margins expanding.

“(We) see notable upside to Street estimates and point to the significant potential for some of Amazon’s newer long-term growth initiatives — especially Project Leo and perishable checkout — to begin to demonstrate real traction in 2026,” Mahaney wrote.

Evercore is particularly bullish about growth for Amazon Web Services. Mahaney projects that AWS annual revenue could grow 27% to $163 billion in 2026 and 31% to $214 billion next year. AWS revenue grew 19.7% in 2025 and 18.5% in 2024.

“We estimate AI data center revenue rises to (high-single-digit percentage) of AWS in 2026, while traditional non-AI cloud remains the core and continues to expand at a healthy, improving pace,” Mahaney wrote.

However, Amazon’s plan to spend $200 billion on capital expenditures is an “overhang” for the stock, he added. Mahaney believes capex as a percentage of Amazon’s revenue will peak this year.

Amazon AI Strategy

Wall Street analysts have largely stayed bullish about Amazon. Of the 72 analysts following the stock, 66 hold a buy rating, according to FactSet.

A deep-dive from Needham analysts earlier this week similarly offered a list of reasons Amazon could be an AI winner.

Needham analyst Laura Martin told clients she disagreed with fears that Amazon’s place as an online shopping destination could be weakened by the use of AI agents.

“Since Amazon owns the largest product catalog, fulfillment network, pricing data, reviews, consumer purchase information, and merchant relationships, AI agents will become an additional source of demand feeding Amazon’s backend, aiding its revenue growth,” Martin wrote.

But Amazon stock has struggled since its reported fourth-quarter results in early February. The results included the forecast for $200 billion in capex spending this year, prompting concerns from investors about the returns on that investment.

Investors are looking for “short-term catalysts” for Amazon stock, as New Street Research analyst Dan Salmon told clients Thursday. That’s why there was a “muted reaction” from investors earlier this week after Reuters reported Amazon Chief Executive Andy Jassy told employees AWS could reach $600 billion in annual revenue in 10 years.

“We continue to have high conviction that AWS can be a ‘Great Plains’ AI winner supported by custom silicon, distribution advantages, growing AI lab engagements and legacy workload incumbency,” Salmon wrote to clients. “However, most investors are currently more interested in short-term revenue growth, the rate of broader enterprise adoption and market share dynamics relative to peers.”

Amazon Stock Underperforming S&P 500

Amazon was a market leader in 2023 and 2024 as a member of the Magnificent Seven. But share have gained just 7% from 12 months ago, compared with a 16% gain for the S&P 500.

Meanwhile, U.S. stocks more broadly have been pushed lower by the Iran war in recent weeks and concerns about oil costs. Amazon’s data centers in the region have been hit by Iranian drone strikes.

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Amazon stock has an IBD Composite Rating of 69 out of 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.

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