A Major Catalyst Could Send Amazon Stock to New Highs Vandita Jadeja Wed, November 11, 2026 at 11:35 AM EST 5 min read AMZN -1.62% MSFT -2.22% GOOGM +1.92% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
AWS growth of 39%, its fastest in nearly five years, backs a $325 price target implying 25% upside for Amazon stock.
Amazon's $220 billion capex bill pushed free cash flow negative, yet AWS posted a 38.7% operating margin, suggesting the spending pays off.
Microsoft trades at 30x earnings against Amazon's 36x, while Alphabet's 13x P/E is flattered by a one-time equity gain.
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The 24/7 Wall St. price target for Amazon (NASDAQ:AMZN) is $324.74. The stock has 24.8% upside from the close of $260.21, and our model rates it a buy with high confidence.
AWS is the main driver. Revenue grew 39% in the third quarter, the fastest rate in nearly five years.
Management expects growth north of 40% in each of 2027 and 2028, and the backlog stands at $578 billion. Our 70% confidence reflects near-unanimous analyst support, weighed against a spending cycle that has pushed free cash flow negative.
Shares traded near $263.66. They are up 8.15% over the past week, 2.88% over the past month and 14.23% year to date. The price sits 8.2% below the 52-week high of $287.20 and 34.5% above the low of $196.
Third-quarter revenue rose 12.1% to $201.94 billion, just missing the $202.20 billion estimate. GAAP EPS of $1.89 also missed the $1.96 estimate, although last year's quarter included a $9.5 billion pre-tax gain on Amazon's Anthropic stake. Operating income rose 61.2% to $28.08 billion, and the 13.9% operating margin was the highest in the company's history.
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The bull case reaches $375.91. Bedrock token volume grew nearly 17x year over year. Revenue commitments for Trainium and Graviton chips rose more than 20x.
Management expects advertising growth to return to the high teens in Q4, and grocery is growing about three times faster than the rest of the store. Amazon CEO Andy Jassy said, "We believe that AWS can grow north of 40% in each of 2027 and 2028 and be a trillion-dollar revenue business in the next five to 10 years."
The bear case sits at $280.24. Third-quarter capex rose 120% to $77.26 billion, and 2026 spending should reach about $220 billion. Trailing free cash flow is about -$42.4 billion. AI services carry lower margins than core AWS, and memory costs and tariffs add pressure.
All that spending flows to the power, cooling, and networking suppliers behind the data centers, the group we profiled in a free report on seven AI infrastructure names that aren't chipmakers. Meanwhile, operating cash flow rose 19.4% to $42.42 billion, and AWS posted a 38.7% operating margin, which suggests the spending is already paying off.
AWS's most direct cloud rival is Microsoft (NASDAQ:MSFT). Azure grew 48%, and commercial remaining performance obligations reached $677 billion. Microsoft trades at about 30x trailing earnings, compared with Amazon's 36x. That premium is easier to accept given that AWS has sped up for six straight quarters.
Alphabet (NASDAQ:GOOGL) carries the same AI capex risk. Google Cloud grew 103%, but Alphabet's quarterly free cash flow was -$9,065 million. Its 13x P/E is flattered by a $99 billion equity gain in Q2.
All three companies are posting fast cloud growth while spending heavily on capex. Measured against them, our target looks reasonable rather than aggressive.
24/7 Wall St. keeps its price target at $324.74, with a model rating of buy at 70% confidence. AWS acceleration is what tips the scale.
The thesis gets stronger if AWS growth crosses 40% and Q4 operating income lands near the top of the $28.5 billion to $33.5 billion guidance range. It weakens if capex keeps rising while AWS margins contract. The evidence tips toward the bulls.
These targets extend our base-case model and assume current growth trends hold.
The projections rest on Amazon continuing to execute its current strategy. Faster-than-expected Trainium adoption could send results well above these figures, while a decline in AI spending could leave them well below.
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