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SUMMARY
Parkev Tatevosian, CFA, provides a detailed forecast for Amazon's stock price by the end of 2026, incorporating Wall Street earnings estimates and forward price-to-earnings ratios. The analysis considers multiple scenarios, recent market developments, and improvements in Amazon's AWS and tariff situations.
MAIN POINTS
- Amazon stock rebounds from below $200 to above $266 per share, prompting a new price forecast for 2026.
- Four scenario analyses are presented, with the base case projecting Amazon at $317 per share if current earnings and PE ratios hold.
- Downside scenarios consider lower PE ratios, with potential share prices of $276 and $237, but these are deemed less likely.
- The forecast incorporates macroeconomic factors, easing tariffs, and AI investments, leading to Amazon being rated among the top 15 stocks for 2026.
- Recent Supreme Court tariff rulings and AWS outperformance prompt an upward revision of the 2026 price target to $300–$330 per share.
- The accelerated timeline for reaching the price target necessitates a revision of the 2027 forecast, with shareholders benefiting from the improved outlook.
DETAILED ANALYSIS
Amazon's stock has experienced a significant rebound, climbing from below $200 per share to over $266 as of late May 2026. This upward momentum has led to renewed interest in the company's future valuation, particularly as investors seek guidance on where the stock might be by the end of 2026. The forecast relies on Wall Street's consensus estimate for Amazon's 2027 earnings per share, which stands at $9.86, and the current forward price-to-earnings (PE) ratio of 32.29.
Using these figures, a base case scenario projects Amazon's stock price at approximately $317 per share by year-end, representing an 18.42% upside from current levels.
Alternative scenarios account for both optimism and caution. If Amazon's forward PE ratio rises to 35, possibly driven by continued acceleration in AWS revenue and margins, the share price could exceed $345. Conversely, if market sentiment weakens and the PE ratio drops to 28 or even 24, the stock could end the year at $276 or $237, respectively. However, these downside cases are considered less probable given recent positive developments.
Several factors underpin the improved outlook. The easing of tariff pressures, following a Supreme Court decision that invalidated certain tariffs and mandated refunds, has reduced headwinds for Amazon. Additionally, the company's AWS segment, bolstered by investments in artificial intelligence, has outperformed expectations with accelerating revenue growth and higher margins.
These dynamics have led to an upward revision of the 2026 price target to a range of $300 to $330 per share, a timeline previously anticipated for 2027. As a result, Amazon is now rated among the top 15 stocks to buy for 2026, reflecting both its growth prospects and risk profile. The analysis emphasizes that while many scenarios are possible, the current trajectory supports a favorable outcome for shareholders.
LINKS
- Channel membership for early access, spreadsheets, and Discord community.
- Parkev Tatevosian's book on a six-step investing framework.
- Fiscal.ai financial data platform with a viewer discount.
- Webull investing platform sign-up with bonus shares.
- Subscription link for Parkev Tatevosian's free monthly newsletter on Substack.