While Amazon’s share price continues to face headwinds in the market, the company’s operational foundations are being fortified. A wave of analyst optimism is coalescing around its crucial cloud division, Amazon Web Services (AWS), even as the stock remains in negative territory for the year.
Revised Estimates Spotlight Accelerating AWS Momentum
Market experts at BMO Capital have identified AWS as an even more powerful growth engine than previously anticipated, subsequently naming Amazon shares their “Top Pick.” This upgrade was accompanied by a raised price target to $304 and a reaffirmed “Outperform” rating. The analysts cited discussions with former employees that pointed to accelerating business dynamics. Their revised forecast now projects AWS revenue growth of 24 percent for the first quarter of 2026, up from a prior estimate of 23 percent.
This sentiment is echoed by JR Research, which upgraded the stock to a “Buy” rating. Their analysis underscores AWS’s role as the primary profit driver for the conglomerate, currently contributing over 57 percent of total operating income. Significant investments in proprietary chips and artificial intelligence are seen as laying the groundwork for further margin expansion.
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Strategic Initiatives Beyond the Cloud
Alongside these bullish assessments, Amazon is actively expanding its commercial ecosystem. A newly announced partnership with Slope, a fintech supported by OpenAI, aims to provide U.S. merchants with more flexible financing options through a credit line from JPMorgan Chase. Separately, the company’s Climate Pledge Fund is investing in Mill Industries. This move targets a drastic reduction in food waste at its Whole Foods subsidiary through novel processing technologies, with the goal of lowering operational costs.
Share Performance Lags Behind Operational Narrative
Despite these strategic advances, the equity’s performance has yet to reflect this positive operational narrative. The stock closed yesterday at €189.66, recording a loss of more than 5 percent over the past 30 days. It now trades nearly 19 percent below its 52-week high of €233.20, reached in early February. Since the start of the year, the share price has declined by approximately 11 percent.
The divergence between the optimistic growth projections for the cloud business and the current stock trend is pronounced. For investors, the critical question will be whether Amazon can translate the forecasted cloud growth rates of over 20 percent into forthcoming quarterly results, thereby shifting market sentiment.
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