Benchmark lowered its price target on Amazon.com to $275.00 from $295.00 and left its Buy rating intact after the cloud and retail giant disclosed a dramatic increase in planned capital expenditures for 2026. The adjustment of the target sits within an analyst range of $230 to $360, and Amazon is trading at a price-to-earnings ratio of 28.78.
The price-target reduction follows Amazon’s announcement that it will commit $200 billion in capital expenditure in 2026, about $40 billion more than consensus forecasts. Market participants reacted quickly: the combination of stepped-up AI investment and an outlook for softer operating margins pushed the stock down roughly 10% in after-hours trading.
Despite the market selloff tied to the spending plan, the company’s underlying financial profile shows durability. Composite financial metrics give Amazon a "GOOD" overall health score of 2.84, with particularly strong marks for profitability at 4.04 and growth at 3.72. Over the trailing twelve months the company recorded revenue of $716.92 billion, representing 12.38% top-line expansion.
Benchmark emphasized that its decision to lower the price target primarily reflects a compression in the valuation multiple under current market conditions rather than a reassessment of fundamental operating performance. The firm noted that, if it had left its valuation multiple unchanged, its work would have pointed to a share price "well north of $300." That valuation view is consistent with a low price-to-earnings level relative to near-term earnings growth, as shown by a PEG ratio of 0.94.
Operationally, Amazon’s cloud business continues to be a major growth engine. AWS reported 24% year-over-year revenue growth with an accelerating contribution in dollar terms on a quarterly basis, and Benchmark highlighted that AWS margins remain robust. The analyst also pointed to improvements in core retail operating efficiencies as a positive offset to the heavy capex program.
Amazon’s market position and historical performance were reiterated in the firm’s commentary. With a market capitalization of $2.19 trillion, the company is characterized as a significant Broadline Retail participant that has delivered a 13% revenue compound annual growth rate over the past five years and a 13% return on invested capital. Benchmark described Amazon as a "long-term AI winner" positioned to benefit from a period of hyper-growth in the AI ecosystem and to take market share across multiple parts of its business.
Recent quarterly results underscore the tension in analyst thinking. Amazon posted stronger-than-expected fourth-quarter revenue, driven in part by AWS’s 24% year-over-year expansion that exceeded analysts’ projections and contributed materially to the firm’s positive earnings surprise. Still, multiple firms have revised their targets amid worry about the scale of capital spending.
Other notable analyst moves include Piper Sandler lowering its price target to $260 and Cantor Fitzgerald trimming its target to $250, both maintaining Overweight or equivalent positive ratings. TD Cowen reduced its target to $300 and sustained a Buy stance. Stifel and RBC Capital reaffirmed positive outlooks with $300 price targets, although RBC explicitly raised concerns about Amazon’s 2026 capex guidance and the potential implications for competitiveness.
These reactions illustrate a mixed consensus: earnings and AWS momentum are strong, but future spending commitments and their effect on margins and capital allocation are introducing near-term uncertainty among sell-side analysts.
Key metrics and takeaways:
- Benchmark price target cut to $275 from $295; Buy rating maintained.
- Amazon plans $200 billion in capex for 2026, roughly $40 billion above previous analyst expectations.
- AWS grew 24% year-over-year with accelerating dollar contribution; company revenue in the last twelve months totaled $716.92 billion, up 12.38%.
Analyst sentiment snapshot:
- Valuation pressure drove the price-target adjustment, not a wholesale downgrade of fundamentals.
- PEG ratio stands at 0.94, indicating a low P/E relative to near-term earnings growth.
Bottom line - The firm-level reaction to Amazon’s expanded 2026 capital plan is a reminder that large strategic investments can produce short-term valuation volatility even when core profit and growth metrics remain healthy. Analysts are balancing robust AWS performance and retail efficiency gains against the risk that elevated capex will exert pressure on margins and capital returns in the near term.