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Related tickers and likely impact
AMZN
▲ Likely positiveAmazon
Relevance: high
| Market | US stocks |
|---|---|
| Sector | Consumer Discretionary |
| Industry | Broadline Retail |
| Market cap | $2.7T |
| Close on 10/23/2026 | 248.04 |
| Change that session | -0.93% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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- UBS on Amazon: Street’s AWS margin estimates for 2027 are too low
UBS raised its Amazon price target to $348 from $318 and kept its Buy rating ahead of third-quarter results on Oct. 29. Analyst Stephen Ju argues Wall Street underestimates AWS margins, forecasting a 46% AWS operating margin in 2027 versus 38% consensus. He says the stock’s muted reaction after second-quarter results reflects investors pricing in 2027 capex above $300 billion, which could leave free cash flow at zero or negative. UBS estimates AWS will add about $80 billion in revenue, and holding margins near the second quarter’s roughly 39% would require about $29 billion in extra SG&A spending, three times the 2026 plan. Ju expects investors will be forced to raise margin, EPS and FCF forecasts as Amazon reports.
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UBS raised its price target on Amazon (AMZN) to $348 from $318, implying about 40% upside from current levels, and kept its Buy rating. UBS forecasts AWS operating margins of 46% in 2027, versus a consensus estimate of 38%, with roughly $80 billion in incremental AWS revenue and $20 billion in depreciation and amortization expenses. To keep the operating margin near the second-quarter level of about 39%, UBS estimates Amazon would need an additional $29 billion in selling, general and administrative expenses. The shares were muted after Q2 results as investors worried that 2027 capital expenditures could exceed $300 billion and eliminate free cash flow. Amazon reports third-quarter 2026 results after market close on Thursday, October 29, with analysts expecting revenue of $202.20 billion and adjusted EPS of $1.96.
- Forget Alphabet and Microsoft: Is Amazon the smartest AI play ahead of earnings?
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Wall Street analysts project Amazon (AMZN) will report quarterly earnings of $2.01 per share, up 3.1% year over year, on revenue of $202.11 billion, up 12.2%. Over the past 30 days, the consensus EPS estimate for the quarter was revised down 0.4%. By segment, analysts expect AWS net sales of $45.42 billion (+37.6%), North America $113.39 billion (+6.7%), International $43.21 billion (+5.7%) and advertising services $20.87 billion (+17.9%). The article notes that changes in earnings estimates are a notable factor in anticipating investor reactions ahead of a company's earnings release.
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