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Amazon (NASDAQ:AMZN) closed just above $173 on Tuesday with a 3.5% gain, its best showing in several sessions. But the bigger picture still looks murky. Shares remain down 30% from February’s all-time high and have badly lagged the broader S&P 500 during the market’s recent rebound.
Moreover, while the stock has managed to stay above its Apr. 7 low, it hasn’t attracted enthusiastic buyers. The trading range has narrowed, the bid has weakened, and price action suggests a standoff between bulls trying to stage a bounce and bears unwilling to let it rip. With earnings due next week, something will give, and that catalyst may be right around the corner.
Wall Street Still Loves It
Despite the muted stock performance, Wall Street hasn’t backed off. Analyst enthusiasm around Amazon has only grown louder in the past week. Telsey Advisory Group, Goldman Sachs, Jefferies and Scotiabank (TSX:BNS) have all reiterated Buy or equivalent ratings, with Scotiabank calling for a price target of $250. That implies more than 40% upside from Tuesday’s close.
Morgan Stanley still names Amazon a Top Pick and maintains an Overweight rating, even while acknowledging that macro uncertainty has clouded near-term visibility. Though the firm recently lowered its 2026 EPS forecast to $7 and reset its price target at $245, this is still far from where the stock is trading now.
The takeaway is that despite near-term noise, analysts treat Amazon’s weakness as an opportunity, not a warning. Valuation, growth potential, and AI leverage are all cited as reasons for the bullish heading into earnings.
Valuation Is Becoming Hard to Ignore
Bank of America made headlines this week by framing Amazon’s valuation in comparison to Walmart (NYSE:WMT). At 23x 2026 GAAP P/E, Amazon trades directly to Walmart’s 32x multiple at a meaningful discount. Analyst Justin Post argued that macro headwinds have unfairly steered investors toward Walmart despite Amazon’s superior AI potential and the margin upside within its retail and cloud businesses.
He also noted that Amazon’s scale gives it a real edge in a world of rising tariffs. With global logistics locked in and its vast fulfillment network already built out, Amazon may be positioned to gain share if trade tensions disrupt smaller players.
That P/E discount is hard to ignore, especially when paired with a stock that is now trading around levels last seen in 2020. With so much of the downside already priced in, the risk-reward heading into next week’s report could be favorable.
Mixed Signals From AWS and Macro Jitters
Still, the concerns haven’t vanished. Over the weekend, Wells Fargo noted that Amazon Web Services (AWS) has paused some leasing discussions for data centers, especially internationally. While not a deal-breaker on its own, the move adds to a sense of cautious positioning in one of Amazon’s highest-margin businesses.
Analyst Eric Luebchow noted that this pause is similar to what’s being seen elsewhere in the industry as companies digest aggressive leasing activity from the past year. While it doesn’t imply cancellations, the optics aren’t great for those looking for signs of acceleration.
More broadly, macro uncertainty continues to weigh on sentiment. Higher interest rates, trade concerns, and general caution toward mega-cap tech have left Amazon somewhat out of favor. Even with analysts backing it, the stock hasn’t gained meaningful traction, which could change quickly if next week’s earnings reset the narrative.
Earnings Could Be the Catalyst
With Amazon reporting earnings next week, the clock is ticking to resolve this range. The company has a solid history of outperforming expectations, and another strong print could force short-covering and reinvigorate institutional interest.
A weaker-than-expected number, however, might cement the current malaise for longer.
The stock has now been grinding along at 2020-era price levels, with bulls unable to break higher and bears unable to push it lower. With analyst sentiment solidly in the bull camp, next week could bring the clarity both sides have been waiting for.
Amazon is stuck in neutral, but not for lack of support. Analysts continue to pound the table, and valuation metrics are starting to flash cheaply. The problem has been follow-through; buyers just haven’t shown up in force yet. That could be about to change.