TD Cowen Bullish on Amazon Stock Amid AWS Growth Outlook
TD Cowen has reaffirmed its Buy rating for Amazon.com (AMZN) 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 forecasts third-quarter 2026 revenue of $202 billion, aligning with consensus estimates. This growth is anticipated to be driven by AWS revenue, which is expected to increase 41% year-over-year, up from approximately 37% in the second quarter of 2026. The firm also estimates operating income of $27.6 billion, about 6% above consensus.
For AWS specifically, TD Cowen's revenue and operating income estimates are 3% and 9% above consensus, respectively. This is attributed to AI revenue ramping up to nearly $10 billion, accounting for roughly 60% of year-over-year incremental AWS revenue. Amazon shares have risen approximately 11% year-to-date, slightly behind the S&P 500'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, as opposed to 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. This is 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.
In other recent news, Amazon announced several new AI-powered advertising products at its unBoxed 2026 conference, including the Amazon Ads Agent and Full-Funnel Campaigns. Cantor Fitzgerald reiterated an Overweight rating with a $320 price target, highlighting the potential impact of these tools on Amazon’s advertising capabilities. Wells Fargo maintained an Overweight rating with a $338 price target following AWS’s announcement of a 15% increase in GPU reserve pricing, marking the fourth consecutive quarterly price hike. This underscores AWS’s pricing power, with prices for certain GPU classes rising significantly this year.
Goldman Sachs added Amazon to its Director’s Cut list for October, reflecting changes in the firm’s portfolio recommendations. Rosenblatt raised its price target for Amazon to $360, maintaining a Buy rating, and suggested that concerns over agentic commerce impacting Amazon’s advertising economics might be overstated. Evercore’s survey of advertising agency executives indicated positive revenue trends for Amazon, alongside Meta and Google, reinforcing the company’s strong position in digital ad spending.