Amazon.com, Inc. (AMZN) had a decent year in 2025, but nobody would call it impressive. The stock climbed 5% while the S&P 500 jumped 16% and the Nasdaq soared 20%. Solid retail execution and margin expansion couldn't shake investor concerns that Amazon Web Services was falling behind in the AI race. Now Wall Street is asking whether AWS can turn things around and give the stock fresh momentum in 2026.
The AWS Comeback Story
BofA Securities analyst Justin Post thinks the answer is yes. He reiterated a Buy rating on Amazon with a $303 price target, calling it his top large-cap internet stock for 2026. The core thesis? Improving sentiment around AWS's AI positioning could become the key driver this year after cloud worries weighed on shares throughout 2025.
Post noted that weaker confidence in AWS's competitive position helped push Amazon's forward EV/EBITDA multiple down about 15% year over year. That's a meaningful valuation compression, and it suggests the market has been pricing in some real doubt about whether Amazon can keep pace with rivals in cloud AI.
But the analyst sees reasons for optimism. He expects AWS growth to accelerate in 2026 as new capacity comes online and recent leadership changes at AWS create an opening to sharpen the company's AI narrative. Meanwhile, strong growth in Rufus usage supports what he calls "a more agentic future" for Amazon's retail business.
The Long-Term AI Advantage
For long-term investors, Post sees a path where AWS could turn its AI positioning into an actual competitive advantage. If Amazon's proprietary technology—its large language model work and Trainium chips—improves versus competitors, AWS could compete as a lower-cost provider just as enterprises increasingly focus on AI inference cost efficiency. That's the kind of positioning that matters when everyone's worried about runaway AI spending.