UBS on Amazon: Street’s AWS margin estimates for 2027 are too low

What happened: UBS raised its Amazon price target to $348 from $318 and reiterated a Buy rating ahead of third-quarter results on Oct. 29, saying Wall Street underestimates AWS margins. Key numbers: Price target $348, up from $318. UBS forecasts a 46% AWS operating margin in 2027 versus consensus of 38%. Q2 AWS margin was roughly 39%. Why it matters: UBS argues investors will have to raise margin forecasts as Amazon reports each quarter, which it says should drive higher EPS and free cash flow forecasts for 2027 and beyond. Market: +0.4% today ($249.68), +10.2% YTD, 0.3x vol — as of 15:32 UTC Verified: Q3_2026 (Oct 29) revenue $203.9B vs $203.9B est; next print ~Jan 28

UBS raised its Amazon price target to $348 from $318 and reiterated a Buy rating ahead of third-quarter results on Oct. 29, saying Wall Street underestimates AWS margins.

UBS argues investors will have to raise margin forecasts as Amazon reports each quarter, which it says should drive higher EPS and free cash flow forecasts for 2027 and beyond. Market: +0.4% today ($249.68), +10.2% YTD, 0.3x vol — as of 15:32 UTC Verified: Q3_2026 (Oct 29) revenue $203.9B vs $203.9B est; next print ~Jan 28