Following Q4 2025 results, UBS lowered its price target on Amazon to $301 from $311 after the company issued FY2026 capital expenditure guidance of $200 billion, well above expectations of $150 billion. While the elevated spending surprised the market, I view it as a strategic investment into long-term growth, particularly in AI infrastructure and cloud capacity. UBS projects AWS growth to accelerate to 38% in 2026, doubling from 19% in 2025, with mid-30% expansion potentially sustained through 2027. This reinforces my conviction that short-term margin pressure may translate into stronger long-term earnings power and valuation upside.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
