AMZN
The setup is basically: prove it
Amazon is heading into earnings with the market doing what it always does before a big report: acting like a nervous cat near a bathtub. BNP Paribas analyst Nick Jones says the stock still looks attractive, but the real test is whether AWS can keep sprinting while Amazon keeps pouring money into AI, data centers, and the rest of its cloud empire.
Jones slapped an Outperform rating on Amazon and set a $355 price target, which implies about 39% upside from the cited $256.30 share price. That’s not exactly a shrug — it’s a pretty loud vote of confidence at a time when investors are worrying that AI spending might eat into near-term profits.
What investors are watching
Jones thinks the Street may be underestimating a few things:
- AWS growth: he sees 43% to 45% revenue growth, above the 38% consensus.
- Operating income: he expects around $28 billion, topping the $25.9 billion estimate.
- Retail: first-party and third-party sales should stay roughly in line with expectations, with online stores and seller services tracking near 5% year-over-year growth.
In other words, Amazon doesn’t need to be perfect — it just needs to show the cloud business is still humming and the retail engine isn’t coughing up a lung.
The capex elephant in the room
The bigger drama is spending. Jones thinks investors will want Amazon to guide to the high end of fourth-quarter expectations — about $247 billion in revenue and $35 billion in operating income — and he also expects the company to raise its 2026 capex outlook by $5 billion to $10 billion.
That’s the tradeoff with Amazon right now: more AI infrastructure could mean better long-term returns, but in the short term it also means a fatter bill and more hand-wringing about margins. So yes, the company is still beloved. It’s just also expensive to run, like a luxury car that happens to power half the internet.
Big picture
Amazon’s next earnings report is expected on Oct. 29, 2026, and this note is basically a reminder that the stock’s valuation story now lives and dies on execution. If AWS stays hot and spending looks disciplined enough, the bull case survives. If not, investors may keep treating AMZN like a great business with a very pricey bill attached.