Amazon.com, Inc. (AMZN) had a decent year in 2025, but nobody would call it impressive. The stock climbed 5% while the S&P 500 jumped 16% and the Nasdaq soared 20%. Solid retail execution and margin expansion couldn't shake investor concerns that Amazon Web Services was falling behind in the AI race. Now Wall Street is asking whether AWS can turn things around and give the stock fresh momentum in 2026.

The AWS Comeback Story

BofA Securities analyst Justin Post thinks the answer is yes. He reiterated a Buy rating on Amazon with a $303 price target, calling it his top large-cap internet stock for 2026. The core thesis? Improving sentiment around AWS's AI positioning could become the key driver this year after cloud worries weighed on shares throughout 2025.

Post noted that weaker confidence in AWS's competitive position helped push Amazon's forward EV/EBITDA multiple down about 15% year over year. That's a meaningful valuation compression, and it suggests the market has been pricing in some real doubt about whether Amazon can keep pace with rivals in cloud AI.

But the analyst sees reasons for optimism. He expects AWS growth to accelerate in 2026 as new capacity comes online and recent leadership changes at AWS create an opening to sharpen the company's AI narrative. Meanwhile, strong growth in Rufus usage supports what he calls "a more agentic future" for Amazon's retail business.

The Long-Term AI Advantage

For long-term investors, Post sees a path where AWS could turn its AI positioning into an actual competitive advantage. If Amazon's proprietary technology—its large language model work and Trainium chips—improves versus competitors, AWS could compete as a lower-cost provider just as enterprises increasingly focus on AI inference cost efficiency. That's the kind of positioning that matters when everyone's worried about runaway AI spending.

Valuation and Growth Projections

At around $250, Amazon trades at roughly 11x Street 2027 EBITDA and 25x GAAP EPS. That's slightly above Microsoft Corp (MSFT) at 23x but below Alphabet Inc (GOOGL) Google and Walmart Inc (WMT) at 26x and 35x, respectively. Post said the valuation reflects lingering uncertainty about AWS's positioning.

Despite those concerns, he views Amazon as attractively positioned given its AWS AI exposure, expected cloud acceleration, a strong retail position for agentic e-commerce, and a profit growth profile exceeding 20%.

Post projects 25% GAAP operating income growth in 2026, supported by retail margin expansion driven by advertising growth, inbound efficiencies, robotics and headcount leverage. For 2026, he estimates revenues will grow 12% year-over-year to $801 billion, versus the Street's consensus of 11% growth to $796 billion. His GAAP EPS estimate of $7.75 sits slightly below the Street's $7.93.

His 2026 AWS revenue estimate of $156 billion edges slightly above the Street's $155 billion consensus, reflecting cautious optimism that the cloud business can indeed reaccelerate.

Amazon shares were up 0.21% at $247.89 at the time of publication on Monday.