Amazon (AMZN) Stock Forecast & Price Target

Amazon.com exhibits a positive financial outlook driven by substantial revenue growth in key segments, with AWS sales increasing 23.6% year-over-year to $35.6 billion and showing significant sequential acceleration. The company's international sales also performed well, rising 17% year-over-year to $50.7 billion, underscoring its robust global presence, particularly in regions like Germany, the United Kingdom, and Japan. Furthermore, strong guidance for 1Q26 net sales, projected to reach between $173.5 billion and $178.5 billion—a year-over-year increase of 11% to 15%—alongside an increased AWS backlog of approximately $244 billion, highlights Amazon's continued growth trajectory and operational strength.

The analysis highlights several critical factors contributing to a negative outlook on Amazon.com’s stock. International operating margins experienced a decline to approximately 2%, significantly down from 4% earlier in the year, while total free cash flow saw a drastic reduction of 71% year-over-year, failing to meet expectations amid high capital expenditures totaling $128.3 billion. Additionally, competition in the cloud computing sector is intensifying, with Google Cloud rapidly gaining market share, further complicating Amazon’s profitability as operational income is projected to decrease year-over-year.