Why did AMZN underperform in 2025?

AMZN lagged as investors digested cost controls, retail normalization, and cloud optimization, which slowed AWS growth in the short term. Elevated AI and logistics spending also pressured free cash flow. The setup now looks better if AWS re-accelerates, AI capacity ramps, and ads/retail profitability holds, supporting a stronger earnings and cash flow profile into 2026.

What are the key catalysts to watch next?

Focus on the February 5, 2026 earnings release. Look for AWS growth rates, AI infrastructure updates, Trainium utilization signals, ad revenue trends, and capex guidance. Cash conversion and free cash flow outlook will be central to any re-rating. Price action near $229 support and $238 to $241 resistance can guide short-term tactics.

How does valuation stack up right now?

AMZN trades near 33.7x TTM earnings and about 3.7x sales. Street targets average $289.67 with a $300 median. The multiple looks fair if growth improves, but upside depends on AWS re-acceleration and better free cash flow in 2026. Investors should weigh current momentum against execution risks in cloud and AI demand.

Is free cash flow improving soon?

TTM free cash flow per share is $0.99, reflecting heavy investment in AI and logistics. If AWS demand stays strong and AI capacity ramps, FCF conversion should improve in 2026 as spending yields revenue and margin gains. Management commentary on capex pacing and unit economics will help assess timing and magnitude of that improvement.

Global Market Insights

AMZN Stock Today: January 07 — AWS Growth, AI Capex Fuel 2026 Bull Case

ByHuzaifa Zahoor January 8, 2026January 8, 2026

AMZN stock today sits at $233.06 after a recent pullback, drawing focus to AWS growth, AI capex, and free cash flow into 2026. We see a setup where re-accelerating cloud revenue and booked AI capacity could lift earnings next year. With US investors eyeing a potential multiple reset, we break down price action, catalysts, valuation, and risks. First read on AMZN helps position portfolios ahead of the February earnings report.