Amazon’s stock has had a bumpy ride lately. After a tough year filled with worries about competition and tariffs, it seems there’s a glimmer of hope for 2026. In 2025, many investors worried that Microsoft’s Azure and Google Cloud were moving faster than Amazon Web Services (AWS). Additionally, President Trump’s tariffs raised concerns about retail profits. As a result, Amazon’s shares only climbed by 6% so far, lagging behind the S&P 500’s nearly 18% increase.
But there might be good news ahead. AWS recently saw a resurgence, showing a 20% revenue growth in the third quarter—its fastest pace since 2022. Analysts are optimistic, with TD Cowen naming Amazon as its top pick among mega-cap internet companies for 2026. They credit this growth to three main factors: renewed AWS momentum, stronger e-commerce and advertising, and increasing profit margins from ads. Many experts regard Amazon’s advertising sector as a hidden gem, especially with its expanding live sports rights on Prime Video, which may drive ad revenue even higher in the years to come.
On the retail front, Amazon is enhancing the value of its Prime membership. Same-day delivery for groceries is now available in over 2,300 locations, with plans to expand further next year. These moves bring Amazon closer to competing with Walmart.
However, the future hinges on AWS. The key question for 2026 is whether Amazon can quickly ramp up its AI capabilities to meet rising demand. After facing supply constraints, the company plans to double its data center capacity by 2027, depending on solving power availability issues. If Amazon can maintain its growth momentum and improve retail efficiency, 2026 could be a turning point for its stock.
Recent statistics show a resurgence in cloud demand across the industry. A report from Gartner indicates that the cloud services market is projected to grow by 21% in 2026, highlighting the potential for companies like Amazon to thrive in this space.
In summary, while challenges remain, Amazon might be on the path to recovery, mainly driven by its cloud services and revitalized retail strategies.
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