Evercore ISI lowered its 12-month price target on Amazon.com Inc. (NASDAQ:AMZN) to $285.00 from $335.00, while leaving its rating at "Outperform." The revised target still implies meaningful upside relative to the company’s current trading level of $222.69, with InvestingPro indicating the shares sit below their Fair Value estimate.
Evercore characterized Amazon’s latest report as a "Beat & Mixed Quarter," noting that results combined robust performance in several core areas with fresh questions over the company’s capital spending outlook. The brokerage highlighted a strong quarter from Amazon Web Services (AWS), describing the cloud division’s results as delivering "material revenue growth acceleration" alongside market share gains.
In addition to AWS, Evercore pointed to steady revenue growth across Amazon’s retail and advertising lines. On a margins basis, the firm observed that North America and International Operating Margins reached record-high levels after adjusting for one-time items, signaling operational improvements in those regions.
Despite those positives, Evercore’s principal reservation centers on Amazon’s guidance for capital expenditures. Management’s outlook for $200 billion of capex in 2026 was singled out as the primary concern, with the research house warning that such investment intensity makes 2026 likely to be "a negative FCF year" for the company. The firm also flagged lower-than-expected guidance for first-quarter operating income, attributing the shortfall to unanticipated investments in international markets.
Evercore maintained that the "AMZN Long Thesis is intact," saying AWS results are "proving out ROAI" - but tempered that assessment by suggesting the stock is "likely range-bound" until the market gains confidence either in a path to improved free cash flow in 2027 or in a noticeable acceleration in revenue during 2026.
Street reactions to Amazon’s quarter have been mixed, with analysts split on the implications of AWS’s momentum and the company’s elevated capital plan. Canaccord Genuity emphasized AWS’s growth acceleration, noting a 400 basis point increase from the prior quarter and pointing to the addition of 1GW of power as a notable operational milestone during the period. BMO Capital responded to AWS’s performance by raising its price target to $310, citing a 24% growth rate for the cloud business - the fastest since Q3 2022.
Other brokers took a more cautious tone. DA Davidson downgraded its rating on the stock from Buy to Neutral, expressing concern that AWS may be at risk of ceding competitive advantage to Microsoft and Google in the cloud market. By contrast, Susquehanna reiterated a Positive rating and described Amazon as a "long-term secular grower," underscoring continued confidence in demand for AWS. UBS trimmed its own price target to $301, calling out Amazon’s roughly $200 billion 2026 capex guidance as higher than both its internal forecast and consensus expectations.
These divergent broker views underline a central tension: AWS is delivering meaningful top-line momentum and margin improvements in key regions, yet the company’s substantial near-term capital commitments raise doubts about free cash flow in the short term and leave investors weighing multi-year outcomes against next-year cash dynamics.
Market participants will likely monitor two primary indicators going forward - the trajectory of AWS revenue and market share, and any signs that capital spending moderates or that investments begin to translate into positive cash generation. Until either clearer free cash flow improvement in 2027 or accelerated revenue in 2026 becomes apparent, Evercore suggests the shares may remain confined to a trading range.