Here's what would it take for an Amazon stock comeback in 2026
After a year defined by worries about cloud growth and tariff impact on retail, Amazon stock heads into the new year poised for gains.
TL;DR
- Amazon stock faced challenges in 2025 due to worries about cloud growth and tariff impacts on retail margins.
- AWS reaccelerated to 20% revenue growth in Q3, its fastest pace since 2022, boosting Amazon's prospects for 2026.
- TD Cowen identifies sustained AWS growth, e-commerce and advertising momentum, and ad margin expansion as key growth drivers.
- Amazon's advertising business, including Prime Video's live sports, is seen as an underappreciated growth area.
- Retail efforts include faster delivery, with same-day delivery for perishables expanding to over 2,300 cities and free same-day grocery delivery on orders over $25.
- Meeting AI infrastructure demand and increasing data center capacity by 2027 are crucial for AWS's future growth.
- A meaningful stock recovery in 2026 depends on consistent capacity conditions, maintaining AWS growth, and expanding ads and retail efficiency.