Amazon named ’Top Mega Cap Internet Pick’ at TD Cowen

Investing.com -- Amazon has been named TD Cowen’s “top ’26 large cap pick”, with the firm highlighting the company’s accelerating cloud growth, strengthening retail and advertising trends, and continued margin expansion as the three pillars of its bullish call.

Analyst John Blackledge reiterated a Buy rating and a $300 price target on the stock in a note on Wednesday, saying Amazon is the firm’s “Top Mega Cap Internet Pick.”

TD Cowen said it sees “three key drivers for AMZN shares in ’26.”

These are faster AWS revenue growth, momentum across e-commerce and advertising, and “continued op margin expansion.”

The firm expects AWS to re-accelerate thanks to “core and AI workload demand and higher AI capacity amid the historic AI infrastructure build.” It added that AWS revenue should “accelerate in 4Q25 and accelerate further in both ’26 and ’27.”

The analyst also expects strong performance from Amazon’s retail and ad businesses, writing that e-commerce should benefit from “continued record delivery speed,” expansion of same-day perishables, and deeper investment in rural markets.

TD Cowen forecasts that Amazon’s 2026 advertising revenue will grow in the high teens year over year, driven by sponsored products, demand-side platform momentum, and an expanding Prime Video ad business.

On profitability, TD Cowen projects 2026 operating income of $104 billion, or approximately 4% above consensus, implying 12.8% GAAP operating margins.

The firm said margin gains will come as “high margin Ads and AWS businesses continue ramping while eCommerce margins benefit from lower cost to serve.”

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