Goldman Sachs reaffirmed its conviction in Amazon on Wednesday, lifting its price target on the e-commerce and cloud computing giant to $300 from $290 while naming it the firm's top large-cap stock pick for 2026.

The upgrade from analyst Eric Sheridan comes as Amazon continues to demonstrate strength across its key business segments, particularly Amazon Web Services (AWS) and its rapidly expanding advertising division. The new price target implies approximately 15% upside from current levels.

AWS Growth Remains the Cornerstone

At the heart of Goldman's bullish thesis is Amazon Web Services, the company's cloud computing arm that has become a profit engine for the broader enterprise. Sheridan and his team project AWS revenue growth to accelerate in 2026, driven by enterprise digital transformation and surging demand for AI computing infrastructure.

"We see AWS as the primary driver of Amazon's value creation over the next several years," the Goldman note stated. "The combination of secular cloud adoption and AI workload expansion creates a compelling runway for sustained growth."

AWS currently commands approximately 32% of the global cloud infrastructure market, and Goldman expects this share to remain stable or potentially expand as enterprises increasingly consolidate their cloud spending with established providers.

Advertising Business Accelerates

Beyond cloud, Goldman highlights Amazon's advertising business as an underappreciated growth catalyst. The segment, which generates revenue from sponsored products and display advertising across Amazon's retail platform, has become the company's fastest-growing major business line.

"Amazon's advertising business has reached a scale and maturity that positions it as a durable, high-margin contributor to overall profitability. We see continued momentum as brands shift digital ad dollars toward retail media."

— Goldman Sachs Research Note

The advertising business benefits from Amazon's treasure trove of consumer purchasing data, allowing advertisers to target customers with remarkable precision. As the broader digital advertising market recovers from its 2024 slowdown, Amazon stands to capture an outsized share of incremental spending.

Retail Operations Showing Efficiency Gains

Goldman's analysis also points to improving efficiency in Amazon's core retail operations. After years of massive capital investment in fulfillment infrastructure, the company is now harvesting the benefits of those investments through lower per-unit shipping costs and improved delivery speeds.

The analyst team notes that Amazon's same-day and next-day delivery capabilities have become a significant competitive moat, making it increasingly difficult for rivals to match the company's convenience proposition. This operational excellence supports both customer loyalty and margin expansion.

Competitive Landscape

The Goldman upgrade comes at a pivotal moment for big tech valuations. With the broader market rotating out of momentum-driven tech stocks, Amazon's more diversified revenue streams and improving profitability profile make it an attractive option for investors seeking quality growth.

Among the "Magnificent Seven" tech giants, Amazon trades at a relative discount on a price-to-earnings basis, reflecting lingering concerns about retail margin volatility. Goldman sees this valuation gap as an opportunity, arguing that the market underappreciates the company's margin expansion potential.

Key Risks to Monitor

The Goldman note acknowledges several risks that could derail the bullish thesis:

  • Intensifying cloud competition: Microsoft Azure and Google Cloud continue to invest aggressively, potentially pressuring AWS market share and pricing power.
  • Regulatory scrutiny: Amazon faces ongoing antitrust investigations that could result in operational restrictions or forced divestitures.
  • Consumer spending uncertainty: A potential recession could impact retail revenue, though Amazon's value proposition typically strengthens during economic downturns.
  • AI investment returns: Amazon's massive capital expenditures on AI infrastructure must ultimately translate into revenue growth.

What This Means for Investors

Goldman's endorsement adds to the growing Wall Street consensus that Amazon represents compelling value at current levels. The average analyst price target for Amazon now stands at $295, suggesting most of the Street shares Goldman's optimistic outlook.

For individual investors, the key question is whether Amazon can sustain its growth trajectory while improving profitability—a balance the company has struggled with historically but appears to be mastering in recent quarters.

With AWS positioned to benefit from enterprise AI adoption, advertising emerging as a margin-rich growth engine, and retail operations running more efficiently than ever, the fundamental story behind Goldman's conviction appears sound. Whether the market will reward that story with a $300 stock price remains to be seen, but one of Wall Street's most influential voices has placed its bet.