UBS predicts another strong quarter for Amazon. The bank maintained a buy rating on the e-commerce giant and raised its 12-month price target to $279 per share from $271. The new forecast suggests a 23% rise from Monday’s close. The target change was made ahead of Amazon’s third quarter report. Analyst Steven Zhu made several revisions to his forecast for Amazon ahead of the announcement, including a slight increase in the e-commerce sector, benefiting from higher inventory levels from third-party sellers. Analysts believe this will be accompanied by margin expansion due to improved unit economics. He also cited the potential for high-margin revenue from ad-supported Prime Video, which he said should become a more meaningful contributor over time. AMZN YTD Mountain AMZN YTD Chart Ju also believes Amazon Web Services’ growth could accelerate as headwinds such as capacity constraints ease. As Amazon expands its service levels by increasing the availability of Prime’s same-day and same-day delivery, the company’s total product value and market share could also increase, Ju added. “Overall, we continue to see upside potential across Amazon’s business segments, including e-commerce, cloud, advertising, and Kuiper/low-Earth orbit satellites,” the analysts wrote. “And while we’re getting more clarity on when those benefits will be realized, especially for Kuiper, the overall upside hasn’t materialized yet.” Amazon’s stock has risen 3% this year. Zhu said Amazon’s relative underperformance this year has created a good buying opportunity. “In our view, AMZN stock has underperformed at +4% year-to-date (compared to its Internet megacap peers) and remains a coiled spring, even though many of the benefits of investment/capex across e-commerce, AWS, content/advertising, and finally Kuiper have yet to materialize,” he wrote. “Therefore, as earnings begin to materialize more meaningfully, subsequent operating profit and dollar FCF upward revisions should be of greater magnitude relative to peers.” Most analysts are bullish on Amazon. According to LSEG data, 71 out of 72 people covering the stock rate it a “buy” or “strong buy.” (Learn the best strategies for 2026 from inside the NYSE with Josh Brown and others on CNBC PRO Live. Tickets and information here.)
