UBS lifts Amazon price target to $348 ahead of third-quarter earnings
UBS sees about 40% upside in Amazon shares on stronger AWS profitability, despite worries over AI spending. The company reports third-quarter results on October 29.
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what happened
UBS analyst Stephen Ju kept his Buy rating on Amazon and raised the price target to $348 from $318, a level the bank says implies roughly 40% upside, according to gurufocus.com. UBS argues the market is underestimating the profitability of Amazon's cloud business.
The main worry for investors is AI spending. Capital expenditures could top $300 billion in 2027, potentially pushing free cash flow near zero or below it. UBS, however, forecasts a 46% AWS operating margin for 2027, compared with a consensus near 38%.
AWS revenue rose 37% year on year to $42.2 billion in the second quarter, the fastest pace in 18 quarters. Amazon reports third-quarter results on October 29, and analysts expect revenue of about $202.2 billion and earnings of $1.96 per share.
why it matters
The key question for the market is whether AWS margin gains and custom Trainium chips can offset the cost of AI infrastructure. Capex guidance and the free cash flow outlook in the upcoming report will show how durable the bank's bullish case is.
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- UBS Sets Bold Amazon Stock Target Ahead of Earnings — gurufocus.com, 26 October 2026 at 18:38 UTC
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