TD Cowen Bullish on Amazon Shares Driven by AWS Growth
TD Cowen has reaffirmed its Buy rating on Amazon.com stock, setting a price target of $350. The firm's optimism is fueled by expectations of accelerating growth in Amazon's cloud computing division, AWS. TD Cowen anticipates third-quarter 2026 revenue of $202 billion, aligning with consensus estimates, driven by AWS revenue growth projected to reach 41% year-over-year, up from 37% in the second quarter of 2026. The firm also estimates operating income of $27.6 billion, approximately 6% above consensus.
For AWS specifically, TD Cowen's revenue and operating income estimates are 3% and 9% above consensus, respectively. This growth is attributed to AI revenue ramping up to nearly $10 billion, accounting for roughly 60% of year-over-year incremental AWS revenue. Despite an 11% year-to-date rise in Amazon shares, slightly behind the market's 13% gain, the firm projects total third-quarter 2026 revenue growth of 12% year-over-year, driven by AWS acceleration and advertising growth, partially offset by decelerating eCommerce growth.
The deceleration in eCommerce growth is partly due to Prime Day being held in the second quarter of 2026, unlike the third quarter of 2025. TD Cowen forecasts third-quarter 2026 operating income of $27.6 billion, 4% above the high end of Amazon’s guidance range, driven by AWS, advertising, and fulfillment efficiency gains. Amazon has consistently beaten the high end of its operating income range by approximately 9% on average over the past four quarters, excluding one-time items.
Recent developments include Amazon announcing new AI-powered advertising products at its unBoxed 2026 conference, prompting Cantor Fitzgerald to reiterate an Overweight rating with a $320 price target. Wells Fargo maintained an Overweight rating with a $338 price target following AWS’s announcement of a 15% increase in GPU reserve pricing. Goldman Sachs added Amazon to its Director’s Cut list for October, while Rosenblatt raised its price target to $360, maintaining a Buy rating. Evercore’s survey of advertising agency executives indicated positive revenue trends for Amazon, reinforcing its strong position in digital ad spending.