Amazon Stock Price Seen as Historically Cheap Ahead of Q4
Amazon's stock price is lower than its fundamental value suggests, making it a potentially attractive buying opportunity. According to 24/7 Wall St., Amazon trades at $259.39, well below the $343.50 price target set by the publication.
The company's revenue has been growing steadily, with Q2 FY26 revenue hitting $200.6 billion, up 19.62% from the previous year. Operating income also increased, rising 43.24% to $27.46 billion. AWS grew at a rate of 37%, its fastest pace in 18 quarters.
The bull case for Amazon rests on the growth potential of AWS, which is expected to become a few hundred billion dollar revenue business and possibly reach $1 trillion annually. Advertising also remains a significant contributor to Amazon's revenue, with over $70 billion in TTM sales.
However, there are concerns about Amazon's capex guidance for 2026, which may impact free cash flow. The company guides to roughly $200 billion in capital spending and has seen long-term debt climb to $119.1 billion from $65.6 billion.