Is Amazon stock a Buy, Sell, or Hold in 2026?

After a sluggish 2025, Amazon (NASDAQ: AMZN) enters 2026 with renewed interest from Wall Street. Shares gained roughly 5% last year, significantly trailing the S&P 500’s 16% advance. That underperformance is precisely why I believe Amazon deserves a closer look this year.

Early trading in 2026 has already turned constructive, with Amazon up more than 6.7%, effectively outperforming the stock’s entire gain from 2025.

That contrast between share price performance and underlying fundamentals is what makes Amazon worth watching. The company continues to build scale across e-commerce, online advertising, cloud computing, and artificial intelligence, all long-term growth engines. Weighing recent earnings trends against analyst expectations, I believe the stock looks undervalued at current levels.

Amazon’s earnings momentum is building

In the most recent quarter, Amazon reported earnings per share (EPS) of 1.95 versus estimates of 1.57, representing a year-over-year increase of more than 36%. Earlier in the year, results followed a similar pattern, with EPS rising more than 60% year over year in Q1 and over 33% in Q2.

With Q4 estimates already in line with the prior quarter’s reported EPS, expectations appear conservative heading into the next release, leaving room for another potential upside surprise.

Amazon Web Services remains the core long-term driver

Amazon Web Services (AWS) continues to anchor the company’s long-term investment narrative. While cloud growth slowed industry-wide in recent years, AWS has shown signs of re-acceleration. Sales growth increased from 17% in the first half of 2025 to roughly 20% in the third quarter, and several analysts expect that pace to continue improving in 2026.

Recent customer wins reinforce that momentum. AWS expanded its autonomous-driving partnership with Germany-based Aumovio, keeping the artificial intelligence compute theme firmly in focus. AWS is widely viewed as a key indicator of corporate technology spending, particularly for AI-heavy workloads that require substantial computing power.

As artificial intelligence shifts from model training toward large-scale production deployment, AWS’s depth in infrastructure and its long-standing enterprise relationships position the platform well for the next phase of adoption.

Advertising is becoming a quiet growth engine

While AWS gets most of the attention, I think Amazon’s advertising business deserves more credit. In the third quarter, advertising revenue rose 24% year over year to $17.7 billion, making it one of the fastest-growing segments in the company.

This growth is closely tied to improvements in personalization and user engagement across Amazon’s ecosystem. Enhancements to product discovery, recommendation tools, and conversational interfaces are helping improve conversion rates, which in turn increases the value of ad placements for brands.

Unlike retail, advertising carries structurally higher margins, meaning continued growth here can materially lift Amazon’s overall profitability even if consumer spending remains uneven.

Why AMZN bulls stay confident

Bullish investors continue to back Amazon despite its muted stock performance last year, with confidence centered on two areas where momentum is becoming more visible.

First, AWS is expanding its AI infrastructure stack with Trainium servers and updated foundation models through Bedrock, strengthening its appeal for multimodal and third-party AI workloads.

Second, improvements in personalization tools like Rufus are enhancing shopping efficiency by recalling user preferences and suggesting relevant products, which can lift purchase completion rates and advertising effectiveness.

Taken together, these factors support the view that Amazon’s ecosystem is becoming more integrated and more profitable, even if headline revenue growth remains moderate.

Wall Street’s view on Amazon stock

From a Wall Street perspective, sentiment toward Amazon remains overwhelmingly positive. Of the 37 analysts currently covering the stock, 36 rate it a Buy, one assigns a Hold, and none recommend selling.

The average 12-month price target stands at $297.29, implying 23.43% upside from the most recent share price of $240.85. Forecasts range from a high of $340 to a low of $230, reflecting broad confidence in Amazon’s longer-term upside despite some downside variability in analyst expectations.

Recent analyst activity reinforces that optimism. Since the start of the year, five of the six most recent analyst updates tracked by TipRanks have reiterated Buy or equivalent ratings. At Cantor Fitzgerald, analyst Deepak Mathivanan trimmed his price target to $260 from $315 while maintaining an Overweight stance, reflecting valuation discipline rather than a change in Amazon’s underlying fundamentals.

Is Amazon stock a good buy for 2026?

Among the more bullish voices, Jefferies analyst Brent Thill assigned a Buy rating in early January, setting a price target range of $275 to $300. His outlook reflects expectations for accelerating AWS growth, continued strength in advertising, and broader market tailwinds following new highs in the S&P 500.

Jefferies estimates Amazon is trading at roughly 12 times 2026 enterprise value to EBITDA, a valuation the firm considers attractive given the company’s scale and improving margins. The bank expects AWS growth to reach the mid twenties in 2026, with operating margins remaining in the mid thirties.

While some investors argue Amazon trails peers like Microsoft and Google in artificial intelligence development, AWS’s leadership in cloud infrastructure and the shift toward running AI applications in production position Amazon as a key enterprise AI provider.

Amazon’s recent earnings execution, improving cloud trends, and growing advertising business support a constructive outlook heading into 2026. The stock may lack the headline momentum of some AI peers, but its scale and durability continue to underpin a solid long-term investment case.