Raymond James analyst Josh Beck told clients in a Tuesday note that Amazon entered 2026 as a "Tweener" within the firm's AI Stack framework, and that developments in artificial intelligence are poised to be the principal determinant of the company's stock trajectory amid an otherwise favorable fundamental backdrop.
Beck reduced his price target on Amazon to $260 from $275. The new target is derived from a multiple of 27 times projected earnings for 2027. In his note, Beck balanced a cautious stance on risks tied to Agentic Commerce with expectations that Amazon Web Services (AWS) will outperform Street estimates and that the company retains significant upside in robotics.
Looking ahead to the fourth quarter, Beck described his view as constructive. He pointed to strong holiday trends, positive checks in advertising and cloud demand, and AWS estimates that he believes are beatable. Central to his framework is the assessment that the "AI Narrative" will be the primary influence on Amazon's share price over the coming year.
Beck emphasized that progress across several initiatives will be critical to improving Amazon's position in the AI Stack. He listed Trainium and Neuron, Nova and Kira, Alexa+ and Rufus, Zoox and Prime Air drones, and robotics as specific programs investors should monitor for evidence of AI-driven competitive advantage.
On the retail side, Raymond James flagged the potential for Agentic Commerce to create substantial long-term opportunity. The firm estimated roughly $400 billion of potential by 2030 from frameworks intended to simplify product discovery and purchase flow, referencing tools like Rufus and Buy For Me as examples of that strategy in action.
However, the note also contained a cautionary scenario: if Amazon's share of e-commerce declines modestly, core retail growth - spanning first-party (1P), third-party (3P) and advertising revenue - could run about 1% below Street estimates. That caveat highlights sensitivity in the retail and ads businesses to changes in market share.
AWS remains a standout in Raymond James' model. The firm projects AWS revenue growth of 22-23% in 2026, above consensus expectations, driven in part by AI-related sales. Beck's estimates include $11 billion of revenue attributable to AI XPU, $8 billion from AI GPU, and $1 billion from Bedrock. He noted that product innovation at AWS will be a key determinant of whether that growth is durable.
Overall, the note frames Amazon's near-term outlook as contingent on AI execution across cloud, retail, advertising and robotics, with AWS strength offsetting certain retail and Agentic Commerce risks in the firm's financial view.