Key Takeaways
- Evercore ISI maintains Outperform rating on Amazon (AMZN) with a $285 price objective
- AWS revenue forecasted to reach $163B in 2026 (27% increase) and $214B in 2027 (31% increase)
- Evercore designates Amazon as their premier large-cap investment opportunity for 2026, noting the stock trades near its lowest P/E ratio in three years
- Firm boosts overall Amazon revenue and operating income projections by 2–3%, positioning estimates 4–5% higher than consensus
- Capital expenditures anticipated to approach ~$250B by 2027, potentially resulting in ~$10B annual free cash flow deficits
On Wednesday, Evercore ISI’s Mark Mahaney reaffirmed his Outperform stance on Amazon.com (AMZN), maintaining his $285 price objective. With shares currently trading around $208.76, this target suggests approximately 37% potential upside for investors.
Mahaney designated Amazon as his “#1 large-cap long idea for 2026,” pointing to attractive valuation levels, robust cloud expansion, and emerging business ventures as primary catalysts behind his optimistic view.
This assessment follows an updated analysis of Amazon Web Services, the technology giant’s cloud computing arm. Evercore’s revised projections show AWS revenue reaching $163 billion in 2026, representing 27% year-over-year expansion, before advancing to $214 billion in 2027 with 31% growth.
Regarding profitability, Evercore anticipates AWS operating margins of 34% for 2026, with a modest decline to 32% in 2027. These figures remain robust and underscore the ongoing scalability of the cloud infrastructure business.
Evercore has also upgraded its comprehensive Amazon projections. The firm increased revenue and operating income estimates by 2–3%, positioning them 4–5% above prevailing Wall Street consensus figures. This represents a significant divergence from market expectations.
Valuation Analysis and Growth Potential
A cornerstone of Mahaney’s thesis centers on Amazon’s current valuation, which appears attractive relative to historical metrics. The stock is hovering near a three-year low on a price-to-earnings basis, with a trailing P/E of 29.11 and a PEG ratio of 0.98. This PEG figure indicates the market may be undervaluing the company’s growth trajectory.
Evercore highlighted emerging company programs, including Project Leo and Perishable Checkout, as potential catalysts that could deliver more substantial contributions throughout 2026.
BofA Securities shares an optimistic outlook with a Buy rating and $275 price target, particularly following Amazon’s recent introduction of 1-hour and 3-hour delivery services across numerous U.S. metropolitan areas.
Capital Spending Remains a Challenge
The primary headwind involves spending commitments. Evercore anticipates Amazon’s capital expenditures will escalate to approximately $250 billion by 2027, representing a considerable investment level. The firm forecasts roughly $10 billion in free cash flow losses for both 2026 and 2027 stemming from these investments.
Capex intensity — calculated as capital expenditures relative to total revenue — is projected to reach its zenith in 2026, though Evercore acknowledged the possibility of this peak extending into 2027. This represents a genuine constraint on near-term cash generation capacity.
Neverthstanding these concerns, Mahaney contends that this risk is adequately reflected in current share prices, and the overall risk-to-reward profile remains compelling.
On the corporate finance front, Amazon recently secured $36.9 billion through a multi-tranche debt issuance, and successfully completed a €14.47 billion euro-denominated bond offering. Separately, Jeff Bezos is reportedly in discussions to raise $100 billion for a new investment vehicle focused on manufacturing enterprises and AI-powered automation technologies.
According to the latest analyst coverage data, 40 of 43 analysts covering AMZN maintain Buy ratings, with a consensus price target of $280.00 per share.
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