UBS Sees 40% Upside For AMZN Stock — AWS Margins Take Center Stage Ahead Of Earnings

According to The Fly, UBS analyst Stephen Ju maintained a ‘Buy’ rating on the stock with a price target of $348.

• UBS values Amazon at 18 times its updated 2027 EPS estimate and expects margin forecasts to rise in coming quarters, according to Investing.com.
• According to Koyfin data, 42 of the 60 analysts covering Amazon rate the stock ‘Buy’, while 16 rate it ‘Strong Buy’.
• Amazon is scheduled to report third-quarter results on October 29, with analysts expecting revenue of $202.20 billion and earnings of $1.96 per share, according to estimates compiled by Fiscal.AI. 

Amazon.com Inc. (AMZN) shares drew investor attention on Monday after UBS raised its price target to $348 from $318, implying a 40% upside from current levels, pointing to potential upside in Amazon Web Services (AWS) margins. 

According to The Fly, UBS analyst Stephen Ju maintained a ‘Buy’ rating on the shares. The analyst also noted muted share performance following its second-quarter (Q2) results, reflecting investor concerns that Amazon’s 2027 capital expenditures could exceed $300 billion, eliminating free cash flow.

AMZN shares traded marginally lower at the time of writing.

According to Koyfin data, 42 out of 60 analysts covering the stock rate it ‘Buy’ and 16 rate it ‘Strong Buy’. Their 12-month price targets range from $230 to $405, with an average of $331.72.

UBS Sees AWS Margin Upside

According to The Fly, the analyst noted that strong incremental revenue could outpace the operating expense growth required to offset AI-related margin pressure, creating potential upside for AWS margins.

According to a report by Investing.com, UBS forecasts AWS operating margins of 46% in 2027, compared with the consensus estimate of 38%. UBS also projects approximately $80 billion in incremental AWS revenue and $20 billion in depreciation and amortization expenses, the report said.

According to the report, UBS estimates Amazon would need to incur an additional $29 billion in selling, general and administrative expenses to keep the operating margin at its second-quarter level of approximately 39%. UBS believes spending on personnel and other items would need to increase at three times the pace planned for 2026.

UBS values the stock at 18 times its revised 2027 earnings-per-share estimate. It expects investors to raise margin estimates, which could lead to higher earnings and free cash flow estimates for next year and beyond, according to the Investing.com report.

Amazon To Report Q3 Earnings On Oct. 29

Amazon is scheduled to report its third-quarter 2026 results after market close on Thursday, October 29. 

Analysts expect Amazon’s third-quarter revenue to be $202.20 billion, with adjusted earnings of $1.96 per share, according to estimates compiled by Fiscal.AI. 

How Retail Views AMZN

On Stocktwits, sentiment for AMZN remained in ‘bullish’ territory amid ‘normal’ message volumes in the past 24 hours. 

One bullish user said that they believe AMZN stock is more likely to reach $500 over the next one to two years.

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AMZN shares have gained over 6.9% year-to-date.

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