Piper Sandler has reduced its price objective for Amazon.com (NASDAQ:AMZN) to $260.00 from $300.00, while keeping an Overweight rating on the shares.
The research firm's revision comes after Amazon reported fourth-quarter results featuring a 24% year-over-year increase at Amazon Web Services (AWS) - a 4% acceleration that topped expectations of roughly 23% growth. Those results helped propel Amazon to $716.92 billion in annual revenue, equal to a 12.38% year-over-year increase.
Despite those top-line gains and the stronger-than-anticipated performance from AWS, Piper Sandler highlighted Amazon's capital expenditure guidance for 2026 as a key concern. The firm characterized the company's $200 billion capex forecast for 2026 as "meaningfully above expectations." At the same time, Amazon's guidance for first-quarter 2026 EBIT was described by the research house as "mixed."
Piper Sandler noted that Amazon operates with a moderate level of debt and generates sufficient cash flows to cover interest payments. The firm also emphasized the company's persistent focus on cost-reduction efforts and its push toward an AI product cycle - describing the business as "relentless on lowering cost to serve and working toward an AI product cycle."
On Amazon's long-term strategy, Piper Sandler expressed support for management's approach to capacity expansion, calling it the right long-term move even as the firm acknowledged that the market appears unsettled by the outsized capex projection.
Other brokerage notes published in the wake of Amazon's results provide a mixed backdrop for investor sentiment:
- Stifel reiterated a Buy rating and maintained a $300 price target.
- Cantor Fitzgerald cut its price target to $250 but left an Overweight rating in place, citing similar capex worries.
- RBC Capital kept an Outperform rating, acknowledging AWS growth while pointing to competitive pressures from Google Cloud.
- TD Cowen lowered its price target to $300, referencing a 1% revenue beat and AWS's 24% year-over-year growth.
- Telsey Advisory Group repeated an Outperform view with a $300 price target, emphasizing the company's strategic advantages and market share opportunities.
Amazon's shares traded near $206.29 at the time of the assessment and had declined by almost 7% over the previous week, according to the reporting. Piper Sandler's commentary frames the situation as a balancing act between durable cloud growth and heavy near-term capital commitments.
For investors and market watchers, the juxtaposition is clear: AWS continues to deliver above-expectation expansion, but the company's plan to materially increase capacity and spending in 2026 has rattled some market participants and prompted a range of responses from the sell side.