Amazon Emerges as a Top Mega-Cap Contender for 2026

Wall Street's attention is returning to Amazon, with the e-commerce and cloud giant being named a premier investment choice for the coming years. Research firm TD Cowen has selected Amazon as its top mega-cap internet stock pick for 2026, citing a powerful confluence of strategic initiatives. The bullish outlook is driven by a resurgent cloud division, robust advertising growth, and multi-billion dollar expansion plans in key emerging markets.

TD Cowen analyst John Blackledge has reaffirmed his "Buy" rating on Amazon shares, setting a price target of $300. This represents an approximate 30% upside from recent trading levels. His optimism is anchored on three primary growth engines:

• Amazon Web Services (AWS): The cloud unit's revenue growth re-accelerated to 20% in the third quarter of 2025, indicating a firm recovery in enterprise spending.
• Advertising Business: This segment continues to expand at an annual rate exceeding 20%, solidifying its role as a major profit contributor.
• Core E-Commerce: The aggressive rollout of same-day delivery services is enhancing customer loyalty and penetrating new geographic areas.

Blackledge has raised his AWS revenue estimates for the period 2025 through 2030 by roughly 2% per year. He now projects cloud revenue of $358.1 billion by 2030, notably above the current analyst consensus of $325.4 billion. From this perspective, AWS remains the central value driver for the company's future.

Cloud Dominance and AI Infrastructure

Amazon's recent AWS re:Invent 2025 event underscored its serious commitment to leading the AI infrastructure race. The introduction of the custom-designed Trainium3 chip, which offers quadruple the compute performance of its predecessor, was a key highlight. Development is already underway on next-generation Trainium4 and Graviton5 processors, signaling sustained, high-level investment in this critical domain.

Financially, AWS is the profit powerhouse of the entire conglomerate:
* The division's remaining performance obligation stands at approximately $200 billion. This figure excludes a recently reported $38 billion deal with OpenAI.
* In Q3, AWS contributed 66% of Amazon's total operating income while accounting for only 18% of total revenue.

This profitability makes AWS the fundamental lever through which AI investments and margin expansion will most effectively materialize.

Strategic Billion-Dollar Bet on India

Concurrently, Amazon is deepening its investment in one of the world's most crucial growth economies. The company has pledged an additional $35 billion for the Indian market by 2030, building on nearly $40 billion already invested.

The strategy, unveiled at the Amazon Smbhav Summit in New Delhi on December 10, rests on three pillars:
* Digitizing Small Businesses: Using AI-powered tools to bring 15 million local merchants and service providers online.
* Boosting Exports: Enabling cumulative e-commerce exports from India worth $80 billion via its platform.
* Job Creation: Supporting an estimated 3.8 million direct, indirect, and seasonal jobs by 2030.

This commitment positions Amazon as India's largest foreign investor and a leading partner for e-commerce exports, making the country both a growth driver and a geopolitical anchor.

Should investors sell immediately? Or is it worth buying Amazon?

Accelerating Grocery Delivery in the Domestic Market

In its home U.S. market, Amazon is pushing its logistics model toward unprecedented speed. Same-day delivery for fresh groceries is now available in more than 2,300 cities and towns. In regions with access to this service, fresh produce accounts for nine of the ten top-selling items, demonstrating strong customer adoption.

Key developments include:
* The fresh grocery assortment has been expanded by over 30% since August.
* Prime members receive same-day delivery on orders over $25 with no additional fee.
* Ultra-fast delivery within 30 minutes is currently being tested in Seattle and Philadelphia.

This push represents a strategic shift into the high-volume grocery sector, a market with strong traditional competitors like Walmart, moving beyond Amazon's historical non-food focus.

Share Performance and Market Perspective

Despite these numerous initiatives, Amazon's stock has underperformed its mega-cap technology peers this year. Shares are down approximately 8.6% year-to-date and about 10% over the past twelve months. Closing at €196.14 on Thursday, the stock trades nearly 16% below its 52-week high but remains well above its annual low.

In the U.S. market, Amazon shares trade at around 30 times expected earnings, a valuation in line with other large technology firms. The analyst consensus remains strongly positive, with an average price target of $280.47 and a "Strong Buy" recommendation from 47 covering analysts. The stock's underperformance relative to the S&P 500 is viewed by the market more as potential for catch-up rather than a sign of weakness.

Additional Upside from AI Stake

A further potential catalyst exists outside Amazon's core operations: its stake in AI firm Anthropic, the developer of the Claude chatbot. Amazon has invested approximately $8 billion in the company to date.

According to media reports, Anthropic is considering one of the technology sector's largest-ever initial public offerings (IPOs) for early 2026. A successful high-valuation IPO could allow Amazon to realize significant gains on its investment, providing additional upside alongside the strategic benefits of their AI collaboration.

Conclusion: Multiple Engines Firing Simultaneously

In summary, Amazon is executing on multiple growth fronts concurrently: a re-accelerating AWS business with a proprietary chip roadmap, a rapidly scaling advertising and same-day logistics platform, a comprehensive India strategy, and potential valuation gains from its Anthropic stake. TD Cowen's designation of Amazon as its top mega-cap pick for 2026 directly reflects this combination of operational momentum and what it sees as a currently subdued share price, highlighting the substantial upside some analysts believe remains.