After a year defined by worries about cloud growth and tariff impact on retail, Amazon stock heads into 2026 poised for gains. The Club name struggled throughout 2025 as Wall Street worried that Microsoft ‘s Azure and Google Cloud were outpacing the growth rate of the No. 1 cloud, Amazon Web Services, and how President Donald Trump ‘s tariffs could pressure already-thin retail margins weighed on sentiment as well. Amazon shares have gained only 6% year-to-date, trailing the S & P 500 ‘s nearly 18% gain over the same period. The stock was also underperforming its mega-cap tech peers. Amazon at a glance Year-to-date performance: up 6% Forward price-to-earnings multiple: 28.9 versus a five-year average of 44.3 Our rating: Buy-equivalent 1 rating Our price target: $275 a share AMZN YTD mountain AMZN stock performance YTD. Amazon, however, may have turned a corner in the third quarter , when AWS reaccelerated to 20% revenue growth — its fastest clip since 2022. It’s one of the central reasons why the Investing Club sees Amazon as one of the five stocks set for a bounce in 2026. Analysts also continue to have faith in Amazon. TD Cowen named Amazon its top mega-cap internet pick for 2026 earlier this month, pointing to three drivers for growth: sustained AWS growth reacceleration, strengthening e-commerce and advertising momentum, and ongoing margin expansion from ads. In fact, the analysts called advertising an “underappreciated” bright spot. TD Cowen expects Amazon’s ad business, which has already become one of the company’s highest margin segments, to gain an even bigger lift from Prime Video. With an expanding slate of live sports rights, including Thursday Night Football and the one NFL playoff game it streams in January, analysts argue that Prime Video could become a “key driver of Amazon’s ad business in the coming years” as more viewing migrates to streaming and performance-based ads. On the retail side, Amazon continues to deepen the value of the Prime membership through faster delivery. Same-day delivery for perishables now reaches more than 2,300 cities and towns, with more expansion planned for 2026. The company introduced free same-day grocery delivery on orders over $25, pushing Amazon incrementally closer to Walmart . Still, the biggest determinant of Amazon’s comeback is the company’s cloud computing business, which is also its profit engine. The core investor question for 2026 is whether Amazon can bring AI infrastructure online fast enough to meet demand. After years of supply constraints that capped cloud growth, Amazon said it plans to double its data center capacity through 2027. But the ramp hinges on solving power availability. If Amazon can demonstrate consistent capacity conditions, maintain AWS’s growth momentum, and continue expanding ads and retail efficiency, we believe 2026 could mark a meaningful stock recovery. (Jim Cramer’s Charitable Trust is long AMZN, MSFT. See here for a full list of the stocks.) As a…
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