Amazon Investors Bet on AWS to Pull Stock Out of Malaise (AMZN)

Amazon Inc. shares are gaining momentum as investors bet on Amazon Web Services (AWS) to drive a turnaround, reversing years of underperformance amid growing AI-driven demand. The cloud unit’s strong growth in Q3 2025 and recent $38 billion deal with OpenAI have fueled optimism, with analysts noting AWS’s resurgence after being seen as lagging in the AI race. The stock, trading at 24x forward earnings—below Apple (AAPL), Microsoft (MSFT), and Alphabet (GOOGL)—is viewed as undervalued relative to its peers. Analysts project Amazon’s EPS to rise 12% in 2026 and 22% in 2027, while operating income is forecast to grow 26% in 2026 and 24% in 2027. Consensus net earnings estimates for 2026 have risen 8.2% over the past six months. “Amazon has built the AI infrastructure others want to use,” said Clayton Allison of Prime Capital Financial. “It’s the e-commerce giant trading at a discount.” With 95% of Bloomberg-surveyed analysts rating AMZN as a buy, sentiment is shifting rapidly—mirroring Alphabet’s rebound in early 2025 after launching Gemini AI.