Amazon price targets cut before Q3 report as AWS outlook stays firm

what happened

Amazon.com Inc. (AMZN) drew attention on Monday as Wall Street adjusted its valuation ahead of the company’s third-quarter results, due later this month. Wells Fargo moved its target down to $329 from $338 but kept an ‘Overweight’ stance. The Fly reported that the bank sees Amazon beating third-quarter consensus and expects AWS expansion to pick up in the fourth quarter. Wells Fargo said that improvement could place revenue and operating-income guidance at the upper end of Street forecasts. It also expects Amazon to repeat its $220 billion capital-spending outlook for 2026. The shares were down 0.7% in Monday morning trading at the time of writing.

The Fly said Wells Fargo is seeking additional information about Amazon’s consumer AI plans, including its position on emerging AI agents and products such as Meta’s Muse. The Wall Street Journal reported on September 22 that Amazon had prevented Muse from using its shopping platform to place orders for customers. An Amazon spokesperson told Adweek: “We think it's fairly straightforward that third-party applications that offer to make purchases on behalf of customers from other businesses should operate openly and respect service provider decisions about whether or not to participate.”

Cantor Fitzgerald also reduced its Amazon target, taking it to $310 from $320 while retaining an ‘Overweight’ rating. According to The Fly, the firm anticipates healthy cloud acceleration and robust EBIT margins. It also expects management’s remarks to reinforce confidence in the staying power of AI demand.

The Wall Street Journal reported on October 11 that Amazon is negotiating to acquire AI startup Decart in a transaction potentially worth about $7 billion. Decart makes software that lets developers move between AI chips and is working on models that generate and simulate three-dimensional environments. Amazon Web Services reportedly provided the startup with early access to its proprietary Trainium3 chip in 2025. A purchase would add to Amazon’s push to build AI infrastructure and develop custom chips. Retail sentiment on Stocktwits was ‘Bullish’, while message activity over the previous 24 hours was ‘Extremely High’. AMZN has risen more than 13% year-to-date.

why it matters

The pre-earnings target reductions contrast with continued confidence in Amazon’s AWS, margins and AI-related demand. Investors are also watching the $220 billion 2026 capex outlook and the reported Decart talks for indications of the company’s infrastructure strategy.

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