Amazon earns a BUY with a $342 price target implying 32% upside, powered by AWS growing 37%, which is its fastest pace in 18 quarters. Azure is decelerating and Google Cloud trades cheaper, but Amazon's $496 billion AWS backlog justifies its premium valuation over both rivals. A single quarter of $54 billion in capex drove free cash flow negative and pushed long-term debt to $119 billion, which represents the key bear risk.
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Our recommendation is buy with a 90% confidence level, driven by AWS re-accelerating to its fastest growth in more than four years and an AI backlog that reshapes the multi-year earnings picture. Amazon is up 12.4% year to date and 4.94% over the past month, though the stock has cooled 4.71% over the past week from a recent high. Shares trade roughly 14% below the 52-week high of $287.20.
The catalyst was Q2 fiscal 2026 results filed July 30, 2026. Revenue reached $200.6 billion, up 19.62%, with operating income up 43% to $27.46 billion. AWS grew 37% to $42.23 billion, its fastest pace in 18 quarters, and advertising climbed 26% to $19.8 billion.
Shares jumped 17.98% within a day following the report. Bulls point to an AI story that keeps compounding. Amazon's AI and Chips businesses each cleared $25 billion annualized run rates in Q2 with triple-digit growth, and AWS backlog stood at $496 billion, growing triple digits year-over-year.
Trainium2 is fully subscribed, and multi-gigawatt commitments now include Anthropic and OpenAI (the power, cooling, and networking suppliers behind that buildout are the subject of a free report we put together here). Bedrock customers spent more in Q2 than in all prior quarters combined. CEO Andy Jassy told investors he now believes AWS can become a "trillion dollar annual revenue business" over time.
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