Key Highlights
- Evercore ISI maintains Outperform rating on Amazon (AMZN) with $285 price target
- AWS revenue forecasted to reach $163B in 2026 (27% increase) and $214B in 2027 (31% increase)
- Evercore designates Amazon as its premier large-cap investment recommendation for 2026, with shares trading at 3-year P/E lows
- Company-wide revenue and operating income projections increased by 2–3%, positioned 4–5% above Street consensus
- Capital expenditures anticipated to reach approximately $250B by 2027, projecting roughly $10B in annual free cash flow deficits
Evercore ISI’s Mark Mahaney reaffirmed his Outperform stance on Amazon.com (AMZN) this Wednesday, maintaining his $285 price objective unchanged. With shares currently hovering around $208.76, this target suggests potential upside of approximately 37%.
Mahaney designated Amazon as his “premier large-cap investment opportunity for 2026,” pointing to attractive valuation levels, robust cloud expansion, and emerging business ventures as primary catalysts driving his optimistic outlook.
This recommendation follows an updated assessment of Amazon Web Services, the e-commerce giant’s cloud computing arm. Evercore currently anticipates AWS revenue reaching $163 billion throughout 2026, representing a 27% year-over-year increase, before advancing to $214 billion in 2027, marking 31% growth.
Regarding profitability metrics, Evercore forecasts AWS operating margins at 34% during 2026, with a modest decline to 32% expected in 2027. These figures remain robust and underscore the ongoing scalability of the cloud division.
Evercore additionally elevated its comprehensive Amazon projections. Revenue and operating income estimates received a 2–3% boost, positioning them 4–5% above prevailing Wall Street consensus figures. This represents a significant variance.
Valuation Appeal and Growth Potential
A cornerstone of Mahaney’s investment thesis centers on Amazon’s current valuation attractiveness—particularly when measured against its historical trading patterns. Shares are currently trading near a three-year low on a price-to-earnings basis, sporting a P/E of 29.11 and a PEG ratio of 0.98. That PEG figure indicates the market may be underappreciating the company’s forward growth trajectory.
Evercore also highlighted emerging company programs, including Project Leo and Perishable Checkout, as potential catalysts that could deliver more substantial contributions throughout 2026.
BofA Securities maintains a Buy recommendation on the shares, establishing a $275 price objective, following Amazon’s recent introduction of 1-hour and 3-hour delivery services across numerous U.S. metropolitan areas.
Capital Spending Remains Key Concern
The primary headwind revolves around investment levels. Evercore anticipates Amazon’s capital expenditures escalating to approximately $250 billion by 2027, representing a considerable outlay. The firm projects roughly $10 billion in free cash flow deficits throughout both 2026 and 2027 as a consequence.
Capex intensity—calculated as capital expenditures relative to total revenue—is anticipated to peak during 2026, although Evercore acknowledged potential extension into 2027. This represents a tangible constraint on near-term cash generation capabilities.
Neverthstanding these concerns, Mahaney believes this risk is adequately reflected in current share prices, and the overall risk-reward proposition remains compelling.
On the broader corporate landscape, Amazon recently secured $36.9 billion through a multi-tranche debt issuance, while also finalizing a €14.47 billion euro-denominated note transaction. Separately, Jeff Bezos is reportedly engaged in discussions to raise $100 billion for a new investment vehicle focused on manufacturing enterprises and AI-powered automation technologies.
According to the latest analyst coverage data, 40 of 43 analysts tracking AMZN maintain Buy ratings, with the consensus price target established at $280.00 per share.
