Key Points
- Wall Street is bullish on Amazon’s stock, betting on an AI-fueled comeback.
- The optimism is centered on the growth of Amazon Web Services (AWS) and its role in the AI boom.
- Amazon was the worst-performing “Magnificent Seven” stock in 2025 but has started 2026 strong.
- Analysts see a parallel to Alphabet’s 2025 rebound, which a new AI model also drove.
After years of lagging behind its Big Tech rivals, Amazon’s stock may be poised for a major comeback. Wall Street bulls are betting that the company’s cloud computing business, Amazon Web Services (AWS), is perfectly positioned to ride the next wave of the artificial intelligence boom.
Amazon was the worst-performing stock among the “Magnificent Seven” tech giants in 2025, with a gain of just 5%. But in the early days of 2026, things started to turn around. The optimism centers on AWS, which is seeing a surge in demand as companies scramble to secure the computing power they need for AI.
Analysts are also excited about how AI can help Amazon’s e-commerce business, from more targeted advertising to improved efficiency in its massive logistics network.
The stock’s recent underperformance has also left it looking relatively cheap. Amazon is currently trading at a lower valuation than Apple, Microsoft, and Alphabet, and significantly below its own five-year average.
Many on Wall Street are looking at Alphabet’s stunning 2025 rebound as a model for what could happen to Amazon. Google’s parent company was seen as a loser in the AI race until it released its new Gemini model, and its stock has soared 89% since then. Now, investors are betting that Amazon is the next Big Tech stock to catch that AI fire.
“It looks like Google did 18 months ago,” said one chief investment officer. “Things can change very quickly in this sector of the business.”
With AWS posting its fastest growth in years, a new $38 billion deal with OpenAI, and growing confidence in its custom-built AI chips, Amazon seems to have flipped the narrative and is once again seen as a major player in the AI race.
