TD Cowen reduced its price target for Amazon.com (NASDAQ:AMZN) to $300 from $315 and retained a Buy rating on the shares. The adjustment aligns with a market-wide positive tilt toward the company - InvestingPro data cited an analyst consensus of "Strong Buy" with target prices spanning from $230 to $360.
The revision followed Amazon’s most recent quarterly report, which modestly outpaced consensus on revenue by 1%. That topline beat was driven in part by roughly 2% advantages in both the International and Amazon Web Services (AWS) segments. AWS itself accelerated to 24% year-over-year growth and Amazon’s reported backlog increased to $240 billion. Those results contribute to Amazon’s aggregate revenue expansion of 12.38% over the trailing twelve months.
On the profitability side, Amazon’s operating income surpassed consensus expectations by about 10%, when excluding one-time charges. TD Cowen highlighted that Amazon’s chip business has scaled to an annual run rate exceeding $10 billion. Valuation metrics cited in the update included a price-to-earnings ratio of 31.47 and a price/earnings-to-growth (PEG) ratio of 0.94, which TD Cowen noted could indicate relative undervaluation versus the company’s growth profile.
Guidance issued for the first quarter of fiscal 2026 showed revenue brackets that generally matched consensus expectations. However, operating income guidance landed below analyst forecasts - the high end of the range was about 3.1% under consensus. Most notably, management projected approximately $200 billion in capital expenditures for 2026, a figure TD Cowen described as "well above" expectations.
Investor reaction to the elevated capex outlook was swift: Amazon shares declined roughly 10% in after-hours trading following the report, a move that reflected concern about the company’s higher-than-anticipated investment plans despite solid segment-level performance.
Other brokerages adjusted their outlooks in response to the same quarterly detail. Scotiabank lowered its price target to $275 while keeping a Sector Outperform rating, attributing the change to capex concerns. Evercore ISI trimmed its target to $285 and characterized the quarter as "Beat & Mixed," acknowledging strong segment results but signaling worry about capital spending. UBS moved its target to $301 after noting Amazon’s roughly $200 billion 2026 capex guidance, which exceeded both their internal estimate and consensus. Meanwhile, Telsey Advisory Group reiterated an Outperform rating with a $300 target, highlighting growth vectors such as grocery and logistics. Susquehanna maintained a Positive stance, pointing to robust AWS demand and a solid fourth-quarter showing.
The aggregate reaction among analysts and investors underscores a split view: the operational momentum in AWS and certain international markets supports optimism, while the scale of planned capital expenditures has tempered enthusiasm and prompted multiple target reductions.
Key takeaways:
- TD Cowen trimmed its Amazon price target to $300 from $315 but kept a Buy rating.
- Amazon reported a 1% revenue beat overall with AWS accelerating to 24% year-over-year and a $240 billion backlog.
- Market focus has shifted to management’s approximately $200 billion capex plan for 2026, which has led several firms to cut targets despite strong segment results.
Context and market impact:
- Valuation metrics cited included a P/E of 31.47 and a PEG of 0.94.
- Operating income beat consensus by 10% excluding one-time items; first-quarter 2026 revenue guidance sat around consensus while operating income guidance was 3.1% below consensus at the high end.
- Following the report, shares dropped about 10% in after-hours trading.
Risks and uncertainties:
- Higher-than-expected capital expenditures for 2026 - the $200 billion guidance has become a focal point of investor concern and has influenced analyst target adjustments.
- Operating income guidance that missed consensus at the high end by 3.1% introduces uncertainty around near-term profitability expectations.
- Market sensitivity to capital allocation decisions may continue to affect share price volatility despite solid performance in AWS and other segments.
Analysts across the street reflected a mix of caution and confidence: Scotiabank set a $275 target with a Sector Outperform rating; Evercore ISI put a $285 target on the stock and described the quarter as "Beat & Mixed"; UBS moved to a $301 target; Telsey reiterated Outperform at $300, and Susquehanna continued with a Positive rating noting strong AWS demand. Overall, the episode highlights how capital-spending plans can shift near-term sentiment even when operating results show strength.