TD Cowen Bullish on Amazon Amid AWS and AI Growth

TD Cowen has maintained its Buy rating and $350 price target on Amazon.com stock, driven by strong expectations for growth in the company’s cloud computing division, Amazon Web Services (AWS). The firm anticipates a 41% year-over-year revenue growth for AWS in the third quarter of 2026, up from approximately 37% in the previous quarter. TD Cowen also projects total third-quarter 2026 revenue of $202 billion for Amazon, aligning with consensus estimates, and operating income of $27.6 billion, which is about 6% above consensus.

The firm’s optimism is fueled by the accelerating growth of AWS, particularly the ramp-up of AI revenue to nearly $10 billion, contributing significantly to the division’s year-over-year incremental revenue. Amazon’s shares have seen an 11% rise year-to-date, slightly trailing the S&P 500’s 13% gain. The forecast includes a 12% year-over-year revenue growth for the third quarter of 2026, supported by AWS and advertising growth, although eCommerce growth is expected to decelerate due to the timing of Prime Day.

Recent developments at Amazon’s unBoxed 2026 conference introduced new AI-powered advertising products, such as the Amazon Ads Agent and Full-Funnel Campaigns, which have reinforced positive outlooks from analysts like Cantor Fitzgerald and Wells Fargo. Goldman Sachs added Amazon to its Director’s Cut list for October, and Rosenblatt raised its price target to $360, maintaining a Buy rating. Evercore’s survey of advertising agency executives also highlighted Amazon’s strong position in digital ad spending.

Overall, Amazon’s strategic moves and market positioning continue to draw favorable attention from analysts, with a focus on AWS’s pricing power and the company’s robust advertising capabilities.