Amazon pulled back after briefly crossing $3 trillion in market cap, but 24/7 Wall St. still rates the stock a buy with a $342.78 price target. AWS growth accelerated to its fastest pace in 18 quarters, while rising capex and negative free cash flow remain the main risk to the thesis.
Amazon retreats after topping $3 trillion
Amazon briefly crossed the $3 trillion market cap threshold on August 3, then pulled back 4.31% as shares now trade at $262.65. The stock sits 14% below its 52-week high of $287.20. News that Jeff Bezos sold roughly $4 billion in shares around the milestone added to the pressure.
Still, 24/7 Wall St. sets a 12-month price target of $342.78, implying 30.51% upside from current levels. The firm rates the stock a buy at 90% confidence. The stock is up 13.79% year to date despite the recent slide.
AWS growth hits an 18-quarter high
The pullback comes even as fundamentals accelerate. Q2 FY26 revenue reached $200.61 billion, up 19.62% year over year. AWS grew 36.7%, its fastest pace in 18 quarters, on a $496 billion backlog. CEO Andy Jassy said AWS could ultimately be a "trillion dollar annual revenue business" over time.
Capex spending remains the key risk
Spending is the counterweight to that growth. Q2 capex reached $54.21 billion, up 68.44%, and full-year 2026 capex is guided to roughly $200 billion. That pressures free cash flow, which sits TTM negative at -$7.6 billion. Bulls counter that Jassy framed the spending as a timing mismatch, since data centers are built two years before the revenue materializes.
Microsoft and Alphabet set the comparison bar
Microsoft's Azure grew 43% last quarter, edging out AWS on growth. Its $678 billion backlog is larger than Amazon's. Microsoft trades at an operating margin of 46.8%, well above Amazon's 11.16%. Alphabet posted 82% Google Cloud growth to $24.77 billion in Q2. Its $4.23 trillion market cap exceeds Amazon's despite a smaller retail base.
Analyst consensus lands near $327, built on 16 Strong Buy, 43 Buy, 3 Hold, and 0 Sell ratings. 24/7 Wall St.'s bull case points to $394.04. Its bear case lands near $292.87, still above today's price.
Source: 24/7 Wall St.
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