TD Cowen Stays Bullish on Amazon (AMZN), Sees Multiple Growth Drivers Into 2026

Core Insights - Amazon.com, Inc. is being closely monitored by analysts as a significant player in the AI sector, with TD Cowen maintaining a "Buy" rating and a price target of $300, highlighting it as their "Top Mega Cap Internet Pick" due to favorable trends in AI, advertising, and margin expansion [1] Group 1: Key Drivers for Amazon Shares - Three primary drivers for Amazon's stock in 2026 are identified: accelerating AWS revenue growth, eCommerce and advertising momentum, and ongoing operating margin expansion [2] - AWS revenue growth is expected to pick up in Q4 2025 and continue to accelerate in 2026 and 2027, driven by demand for core and AI workloads and increased AI capacity amid significant infrastructure development [2] - The retail segment is projected to experience strong growth in 2026, supported by record delivery speeds, expansion of same-day perishables, and investments in rural markets [2] Group 2: Advertising Revenue and Margin Expansion - Amazon's advertising revenue is forecasted to grow at a high teens percentage year-over-year in 2026, fueled by sponsored products, demand-side platform growth, and an expanding Prime Video advertising business [3] - Continued margin expansion is anticipated, with projected operating income for 2026 at $104 billion, approximately 4% above consensus, resulting in 12.8% operating income (GAAP) margins as high-margin advertising and AWS businesses grow, while eCommerce margins benefit from reduced service costs [4]