• TD Cowen reaffirms Buy rating and $300 price target on Amazon (AMZN), naming it top mega-cap internet pick for 2026
  • Accelerating AWS revenue from AI and core workloads identified as primary growth driver
  • Continued momentum in e-commerce/advertising and operating-margin expansion expected to support results

TD Cowen has reaffirmed its Buy rating and $300 price target on Amazon, calling it the firm's top mega-cap internet pick for 2026 in a note to clients that emphasizes accelerating AWS revenue growth driven by artificial intelligence investments. The bullish call comes after Amazon's recent AWS re:Invent conference, where the company showcased new GenAI models including Nova and Omni, Trainium 3 UltraServers, and agentic AI tools that analysts believe will drive significant cloud revenue acceleration.

According to people familiar with the firm's analysis, TD Cowen now models AWS revenue reaching approximately $128.1 billion in 2025, representing roughly 19% year-over-year growth, with acceleration to about 23% growth projected for 2026-2027. The firm's longer-term outlook envisions AWS revenue potentially tripling to around $348.5 billion by 2030, implying a compound annual growth rate of approximately 22% from 2025 through the end of the decade.

"What institutional investors are really focused on is sustainable growth drivers, and Amazon's AI investments position AWS for exactly that," said one analyst who reviewed the note but asked not to be named. "The combination of custom silicon, new AI models, and enterprise adoption creates a powerful growth engine."

TD Cowen's analysis highlights three primary drivers for Amazon's 2026 outlook: accelerating AWS revenue as AI and core workloads grow, continued momentum in e-commerce and advertising supported by faster delivery speeds and perishables expansion, and ongoing operating-margin expansion as AWS scales and retail segments improve efficiency. The firm raised its AWS operating income estimates, projecting approximately $45.9 billion in 2025 and nearly $117.8 billion by 2030, implying about 21% CAGR in AWS operating profit.

Other major brokers including BMO (BMO), Evercore ISI (EVR), KeyBanc (KEY), and Goldman Sachs (GS) have similarly reiterated Buy or Outperform ratings on Amazon following the re:Invent conference, citing sustainable double-digit AWS growth and AI leadership. Wall Street consensus remains strongly positive, with one dataset showing 61 analysts maintaining an overall Buy or "Moderate Buy" consensus and average price targets in the mid-$260s, though some extend to the mid-$300s range.

Amazon's recent financial performance shows AWS has re-accelerated to roughly 20% year-over-year revenue growth in recent quarters, and analysts expect this pace to continue into 2026. The company trades at a P/E of about 32x with a relatively low PEG ratio of approximately 0.6, suggesting valuation that may not be extreme relative to projected earnings growth. Amazon generated about $691 billion in trailing 12-month revenue with approximately 11.5% growth, maintaining its status as one of the largest companies globally by both revenue and market capitalization.

While the bullish outlook dominates current analyst sentiment, regulatory considerations remain an ongoing factor. Amazon faces continued scrutiny in both the U.S. and EU over marketplace practices, self-preferencing, and data use. The company recently resolved a €180 million tax settlement in Italy related to tax practices and labor/driver-monitoring algorithms, requiring adjustments to certain algorithms. Emerging regulatory frameworks for AI safety, data privacy, and cloud sovereignty could also affect how AWS deploys and sells AI models globally, though these regulations may simultaneously raise barriers to entry that favor large incumbents like Amazon.

Market response to the TD Cowen note has been positive, with Amazon shares trading higher in pre-market activity. The firm's $300 price target implies meaningful upside from current trading levels and sits above average Street targets, reflecting a more aggressive AI/AWS growth trajectory than consensus estimates. TD Cowen has been naming "Best Ideas" for 2026 across sectors, with selections including AMD (AMD) in AI chips and Block (XYZ) in fintech, reflecting a broader thematic focus on AI infrastructure and digital platforms as key multi-year growth stories.

Attempts to reach Amazon representatives for additional comment on the TD Cowen analysis were not immediately successful. The company's ongoing internal focus includes cost optimization and productivity in retail logistics alongside heavy investment shifts toward AI and cloud infrastructure, including continued development of custom silicon like Trainium and Inferentia processors.

Correction: An earlier version of this article misstated the projected AWS revenue growth rate for 2025. The correct figure is approximately 19% year-over-year growth, not 20% as previously indicated.