Truist Securities reduced its price objective for Amazon.com (NASDAQ:AMZN) to $280.00 from $290.00 while maintaining a Buy rating, following the company's fourth-quarter results and fiscal-year guidance. The brokerage described the fourth-quarter performance as stronger than both Street expectations and Amazon's guidance, with broad-based strength across Online Stores, Advertising, and particularly AWS.
In its note, Truist emphasized AWS's performance, which grew 24% year-over-year and showed a 4 percentage-point acceleration versus prior comparisons. The firm said these results reflected healthy demand across Amazon's core businesses.
Looking to the company's near-term outlook, Truist pointed to Amazon's first-quarter 2026 guidance as evidence of continued top-line momentum but warned of lower operating income. That contraction in operating income, the firm said, stems from higher operating expenses tied to strategic investments in low-Earth orbit (LEO) initiatives, Quick Commerce, and the expansion of international stores.
A central factor behind Truist's revised valuation was Amazon's fiscal 2026 capital expenditure guidance. The company provided a capex outlook of $200 billion for fiscal 2026, which Truist noted represents an approximately 50% year-over-year increase. The brokerage attributed this jump to Amazon's plans to build out AI capacity to meet anticipated demand.
Despite trimming the price target, Truist maintained a constructive stance on Amazon, calling it "one of the best plays on the secular growth of eCom, Cloud, and Advertising, all at a compelling valuation." The firm balanced the company's earnings strength against the financial implications of the step-up in investment.
Amazon's own fourth-quarter disclosure included several points that underpinned analyst reactions. AWS's 24% year-over-year growth marked a 4 percentage-point acceleration that exceeded expectations. Overall revenue came in about 1% above prior estimates, while EBIT excluding legal and severance costs was 9% higher than anticipated.
Nonetheless, investor attention turned to the company's capital allocation plans. Amazon committed $200 billion in spending for fiscal 2026, which exceeded analysts' prior forecasts by $40 billion, prompting several Wall Street firms to adjust their valuations.
Responses from other brokerages varied but generally reflected concern about the elevated capital expenditure profile alongside recognition of AWS's strength. Benchmark lowered its target to $275 and kept a Buy rating, noting the increased AI investment and softer operating margin outlook. Piper Sandler cut its target to $260 while maintaining an Overweight rating. Cantor Fitzgerald adjusted its target to $250 and remained Overweight. By contrast, Stifel reiterated a Buy rating with a $300 target and described Amazon as a top pick despite capex concerns. RBC Capital also maintained an Outperform rating with a $300 target, acknowledging strong AWS performance but flagging the higher capex guidance.
This mix of solid operational results and an aggressive capital-plan increase has produced a range of valuations among brokerages, leaving investors to weigh near-term margin and cash-flow implications against long-term secular opportunities in e-commerce, cloud services and advertising, and the company's push into AI infrastructure.