Key insights
- UBS reiterates a Buy rating on Amazon (AMZN) with a $333 price target, citing strong AWS growth prospects driven by AI. The firm projects AI to comprise 26% of AWS revenue by end-2026, with significant backlog growth. UBS's revenue and operating income estimates for AWS exceed consensus, suggesting potential undervaluation. This positive outlook, coupled with upward earnings revisions from analysts, supports a bullish stance on AMZN, indicating potential upside for the US equity market, particularly within the technology sector.
Investing.com - UBS reiterated a Buy rating on Amazon.com Inc. (NASDAQ:AMZN) stock with a $333.00 price target on Wednesday. The e-commerce and cloud giant currently trades at a P/E ratio of 32.31 with a PEG ratio of 0.87, suggesting attractive growth relative to its valuation.
The firm refined its methodology for projecting AWS segment revenue after overshooting its forecast for the first quarter of 2026. UBS now splits the performance obligation and backlog into separate components including core non-AI business, Bedrock, and recent contracts with Anthropic and OpenAI.
UBS estimates Bedrock has approximately $35 billion in backlog as of the end of the first quarter of 2026, growing roughly 300% year-over-year. The firm projects AI will account for 26% of AWS revenue by the end of 2026 and 30% in 2027.
The firm anticipates AWS will add $350 billion in backlog in 2026 and beyond. This translates to a revenue forecast of $175.9 billion for the segment, representing 36% year-over-year growth, compared to consensus estimates of $166.6 billion and 29% growth.
UBS’s 2027 operating income estimate stands approximately 40% higher than consensus. Amazon shares have risen roughly 14% year-to-date, and UBS notes the stock trades at 18 times its 2027 earnings estimate on a GAAP price-to-earnings basis. According to InvestingPro, which tracks over 1,400 US equities with comprehensive analysis, Amazon appears undervalued based on its Fair Value assessment. The platform also reveals that 24 analysts have revised their earnings upwards for the upcoming period, reinforcing the bullish sentiment. For deeper insights, investors can access Amazon’s detailed Pro Research Report on InvestingPro.
In other recent news, Amazon announced a significant investment of over £15 billion ($20 billion) in the UK during 2025, marking progress toward its £40 billion investment goal by 2027. This investment included launching new operational sites, expanding studio production facilities, and initiating a drone delivery trial. Meanwhile, Delta Air Lines’ CEO, Ed Bastian, defended the company’s choice of Amazon over SpaceX’s Starlink for in-flight Wi-Fi, citing Amazon’s broader technology offerings. In a separate development, Berkshire Hathaway disclosed the sale of its Amazon holdings, alongside a new $2.65 billion investment in Delta Air Lines. Wolfe Research highlighted Amazon as one of its top picks in the internet sector, alongside DoorDash, Meta, and Chewy. Additionally, TD Cowen reiterated a Buy rating on Amazon, emphasizing the company’s grocery delivery expansion through its Amazon Now program, which promises 30-minute deliveries in several major markets. These developments reflect Amazon’s ongoing strategic initiatives and its role in various sectors.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Most traders can read a chart. The hard part is the moment: entry window open, pattern forming, and you're still waiting for more confirmation. That's the conviction gap — and our chart analysis closes it. Unlike other AIs that just read data, our Vision AI literally "sees" your charts and hands you a complete trading plan: entry, stop-loss, and profit target in under 60 seconds. Know exactly what to do next, every time.