Amazon.com Inc. Stock Holds Firm Amid FTC Pressure and Strong Cloud Growth
Amazon.com Inc.'s stock has held steady despite pressure from regulatory bodies. The company's cloud division, Amazon Web Services (AWS), is driving growth with a 37% year-over-year increase in revenue to $42.2 billion in the second quarter of 2026.
Citi has reaffirmed its 'Buy' rating on Amazon.com Inc., despite an FTC lawsuit focused on advertising practices. The bank expects AWS revenue growth to reaccelerate in the latter half of 2026, supported by demand for artificial intelligence workloads and continued adoption of cloud services.
Amazon.com Inc.'s shares are trading at roughly 23.5 times its 2027 earnings per share forecast of $11.06, below the 31.5 multiple embedded in Citi's price target of $350. The company's regulatory pressure remains a key concern, with an FTC settlement requiring Amazon to pay up to $1.5 billion in civil penalties and refunds.
AWS growth is being driven by demand for AI services, which reached over $25 billion in run rate. However, the company's heavy investment in infrastructure and AI capabilities has led to a free cash flow outflow of $7.6 billion in the trailing 12-month period. Amazon.com Inc. has also announced wage increases for eligible operational employees ahead of the shopping season.