Wall Street's average price target on Amazon stands at about $313, roughly 34% above where the shares trade, four days before the company reports second-quarter results on Thursday, July 30. The stock sits about 16% below its 52-week high after falling about 4.6% on Thursday. Analysts point to three straight quarters of accelerating growth at Amazon Web Services; the market is watching a capital spending plan of about $200 billion for 2026.
Amazon heads into its second-quarter report with the market and Wall Street pulling in opposite directions: the average analyst price target is about $313, roughly 34% above the current price, and the consensus analyst rating is a strong buy. The company reports second-quarter results on Thursday, July 30.
Shares fell about 4.6% on Thursday to $233.66, even though Amazon itself reported nothing. That leaves the stock about 16% below its 52-week high of $278.56.
The AI bill behind the selling
Motley Fool analyst Daniel Sparks ties the selling to spending rather than weak results. Amazon plans to invest about $200 billion in capital expenditures in 2026, most of it aimed at AI infrastructure.
That bill is already visible in the cash flow statement. Trailing-12-month free cash flow fell to $1.2 billion as of the first quarter, down from $25.9 billion a year earlier, driven by a $59.3 billion year-over-year jump in capital spending.
The fear turned fresh again this past week. Alphabet raised its own 2026 capital spending forecast to as much as $205 billion when it reported second-quarter results, and its own shares fell. Amazon fell with the group on Thursday, and a reported Senate investigation into alleged Chinese influence over its marketplace may have added some company-specific pressure the same day.
Three quarters of AWS acceleration
Anyone weighing Amazon stock into the print is reading two sets of evidence from the same company. The clearest piece on the analysts' side is Amazon Web Services, where revenue rose 28% year over year in the first quarter to $37.6 billion.
The trajectory matters more than the single rate. AWS grew 20% in Q3 2025, 24% in Q4 and 28% in Q1 2026, three straight quarters of acceleration. In the first-quarter earnings release, CEO Andy Jassy called the AWS rate "our fastest growth in 15 quarters".
The rest of the quarter held up as well. Total net sales rose 17% year over year to $181.5 billion, and operating income climbed to $23.9 billion from $18.4 billion a year earlier. Management guided for second-quarter net sales of $194 billion to $199 billion, which would represent growth of 16% to 19%.
Sparks flags a risk into the print: if Amazon lifts its capital spending plan significantly, the market's first reaction could be another leg down, even if the underlying business is growing nicely.
Source: Fool
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