Amazon’s Analyst Upgrade Signals Positive Future
Amazon is often a favorite among Wall Street investors, with widespread support from analysts. Up until recently, only one analyst held a skeptical view on the e-commerce giant, but that has now changed.
Wells Fargo analyst Ken Gawrelski has upgraded Amazon’s rating from neutral to buy, increasing the price target from $245 to $280. This suggests a potential 27% increase in share value going forward.
Gawrelski has expressed a “greater confidence” in the acceleration of Amazon Web Services (AWS), bumping his revenue growth forecast for 2026 to 22%, ahead of the general consensus of 18%. This revised outlook is partly based on Project Rainier, an extensive expansion of computing power that aims to significantly boost AWS’s growth.
Specifically, Rainier is projected to contribute 5% and 4% to AWS’s revenue growth in 2026 and 2027, respectively. Given the steady performance of AMZN shares this year, this development seems timely. Gawrelski notes the anticipated AWS rebound could be crucial for Amazon’s stock performance.
To reflect these shifts, analysts have adjusted their AWS revenue estimates upward by 3% for 2026 and 7% for 2027. The first phase of Rainier is expected to launch in January 2026, followed by further expansion later that year. The Indiana Campus, which has a capacity of 2.2GW, could generate around $14 billion annually, contributing to an increase in AWS growth from three points last year to seven points in 2026.
On the competitive front, Gawrelski anticipates that AWS’s market share losses will peak at 470 basis points in 2025 but should stabilize by 2029 at around 32%, down from 47% in 2024. However, that still represents significant revenue potential as the market grows at a 31% CAGR.
With these developments, Gawrelski joins a total of 43 analysts who are optimistic about Amazon’s prospects, contributing to a strong buy consensus. The average price target across these analysts is $265.88, indicating a 22% potential increase in the next year.
