Amazon Stock Price Predicted to Surge 22% by End of 2026
Amazon Web Services (AWS), the cloud computing division of Amazon, is experiencing significant growth acceleration. The company's stock price has been relatively flat for the year, but a recent earnings report suggests that this may change. CEO Andy Jassy stated on the conference call that the company does not have enough computing capacity to meet demand in 2026 and will likely be in the same situation in 2027.
AWS revenue grew 37% year over year during the second quarter, with total revenues projected at $828 billion in 2026. The high demand for cloud computing capacity requires Amazon to spend a significant amount on infrastructure, but this is expected to lead to outsize revenue growth once the investments are online.
The stock price of Amazon (AMZN) is currently priced at about 21 times earnings, which is relatively cheap compared to its peers. However, using an operating price-to-earnings ratio that excludes one-time effects due to investment gains, Amazon's valuation appears more in line with the S&P 500.
Based on this analysis, the author predicts a 22% upside from today's stock price by the end of 2026, leading to a projected price of $316 per share.