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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AMZNcloud computingvaluationearnings
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Related tickers and likely impact
AMZN
▲ Likely positiveAmazon
Relevance: medium
| 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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