Amazon.com Inc (NASDAQ:AMZN) is expected to report fourth quarter results on February 5, with Wedbush analysts noting that investor sentiment has been improving ahead of the release and reiterating an ‘Outperform’ rating and a $340 price target.
“Investor confidence has been building, with sentiment turning more positive following the company's strong report last quarter,” the analysts wrote.
They noted that AWS growth exceeded expectations and pointed to backlog growth and expanding supply as indicators of continued demand.
The analysts expect AWS to be a major driver of Amazon’s performance in 2026. “We expect 2026 to be a big year for AWS serving to catalyze shares toward our $340 PT as the year plays out,” the analysts wrote. They also wrote that Amazon shares trade at about 22 times their 2027 GAAP EPS estimate.
Wedbush highlighted that investors are likely to focus on the momentum in AWS and emerging AI opportunities, the company’s path toward higher profitability and operating margins, capital expenditures to support infrastructure and AI initiatives, and ongoing growth in the advertising business.
“We are constructive on the setup leading into the report given positive commentary around AWS growth, healthy trends for the core retail business, and strong advertiser demand,” the analysts wrote.
Wedbush raised its estimates and forecast Q4 operating income of $25.2 billion, representing an 11.8% margin, slightly above consensus expectations. For the full year, the analysts now expect operating income of $103 billion, with a 12.8% margin.
“We continue to see multiple levers of sustainable margin improvement, including fulfillment optimization and the structural mix shift towards higher-margin AWS and advertising revenues,” the analysts wrote.
They highlighted potential upside catalysts, including automation and robotics in logistics, continued development of Amazon’s AWS infrastructure stack, commercialization of AI capabilities in Alexa and Rufus, monetization of Project Kuiper, and potential Prime subscription price increases.
Wedbush also reiterated Amazon as its top e-commerce pick for 2026.