UBS Maintains Buy Rating on Amazon Ahead of Q2 Earnings, Citing Cloud Growth and Margin Improvements
Amazon is set to report its second-quarter 2026 earnings results on July 30. UBS has lowered its price target for the stock from $333 to $305 but kept a 'Buy' rating due to continued strength in Amazon Web Services (AWS) and improving e-commerce margins. The firm adjusted AWS revenue expectations, shifting approximately $3 billion of OpenAI-related revenue into 2027. Despite this near-term shift, UBS remains optimistic about the cloud unit's growth potential for the second half of 2026 and beyond. It forecasts a 36% increase in AWS revenue in 2026—above market estimates—and expects even stronger performance in 2027 with 48% growth. UBS also anticipates significant outperformance by Amazon's operating income for 2027, projecting it will be nearly 50% higher than current consensus. The firm sees potential margin expansion from improved unit economics and increased investment in grocery services and same-day delivery.
Tickers: $AMZN
Topics: AWS capital expenditures cloud growth e-commerce margins