Goldman Sachs just made a big call on Amazon stock

Amazon.com is heading into a crucial earnings moment. With that, one of Wall Street’s most influential voices just made a subtle but important move.Goldman Sachs lowered its price target on Amazon stock to $275 from $280, while maintaining a Buy rating ahead of the company’s expected earnings report on April 30, 2026. The revision may appear minor at first, yes, but it signals a broader shift in investor attention toward the key risks and opportunities shaping Amazon’s next phase.Amazon shares are trading around $239.89, and that updated target still implies meaningful upside. The bigger question is what could drive or limit that growth in the coming quarters. But, looking at its performance over time, it is fair to prepare for more bullish momentum.Goldman Sachs highlights 4 key Amazon catalysts investors must watchGoldman Sachs analyst Eric Sheridan pointed to four major areas that could define Amazon’s trajectory in 2026, and they go far beyond just online shopping. First is Amazon Web Services (AWS), the company’s cloud division, as reported by investing.com. Investors are closely watching revenue growth and backlog trends to understand whether massive artificial intelligence (AI) investments are translating into strong returns.Second is rising energy prices. With global fuel markets under pressure, higher transportation and logistics costs could impact Amazon’s margins, or even consumer demand. Third is the commercialization timeline for Amazon Leo, a newer initiative that could play a role in Amazon’s long-term ecosystem. Investors are still looking for clarity on how quickly it can scale.Related: UBS quietly resets outlook on AI software giantFinally, Goldman is tracking Amazon’s advertising and marketing platform. This fast-growing segment has become a critical profit driver and could help offset cost pressures elsewhere. Lately, Amazon CEO Andy Jassy has focused heavily on integrating Artificial Intelligence (AI) into the company's advertising, marketing, and shopping platforms.“AI is not a standalone initiative; it’s a multiplier. It will reshape every customer experience we offer and unlock entirely new ones. We will build many of these ourselves and continue making AWS the best place for others to do the same.” Said CEO Andy Jassy in a Letter to ShareholdersAmazon’s AI push is driving massive AWS growthOne reason analysts remain optimistic is Amazon’s aggressive push into artificial intelligence through AWS.According to the company’s latest shareholder letter, AWS has already reached an annualized AI revenue run rate exceeding $15 billion, roughly 10% of total AWS revenue. That number is growing quickly.Even more striking, Amazon’s in-house chip business has surpassed a $20 billion revenue run rate, expanding at triple-digit growth rates year-over-year. These chips are critical for powering AI workloads, giving Amazon a competitive edge against rivals.More Wall StreetBillionaire Dalio sends 2-words on Fed pick WarshTop analyst bets these stocks will boost your portfolio in 2026Bank of America sends quiet warning to stock market investorsCEO Andy Jassy emphasized the momentum, stating, “AWS growing 24%… this growth is happening because we’re continuing to innovate at a rapid rate.”That growth is backed by major partnerships, including collaborations with OpenAI, Visa, the NBA, BlackRock, Perplexity, Lyft, United Airlines, DoorDash, Salesforce, U.S. Air Force, signaling strong enterprise demand.Still, heavy AI spending comes with trade-offs. Amazon is significantly increasing capital expenditures, which could pressure free cash flow in the near term.Other analysts also remain bullish but cautious on spendingGoldman Sachs isn’t alone in maintaining a positive outlook, even with some caution creeping in.Evercore kept an Outperform rating with a $285 price target, pointing to AI growth as a major tailwind. Meanwhile, Stifel trimmed its target to $294, citing geopolitical uncertainty, including energy market volatility.Related: Andy Jassy has great news for Amazon stock investorsNeedham also reiterated a Buy rating but flagged concerns over Amazon’s capital spending plans, which could approach $200 billion in fiscal 2026.This creates a balancing act for investors. Amazon is investing heavily to secure its leadership in AI and cloud computing, but those investments must eventually deliver strong returns. Amazon has invested heavily in AI.Shutterstock Amazon's earnings growth also remains strong despite rising costsAmazon’s latest earnings report shows why analysts are still largely bullish.

Amazon Fourth Quarter 2025:Net sales: $213.4 billion (+14%)Operating income: $25.0 billionNet income: $21.2 billionAWS sales: $35.6 billion (+24% YoY)North America operating income: $11.5 billionInternational operating income: $1.0 billionAWS operating income: $12.5 billionFull Year 2025:Net sales: $716.9 billion (+12%)Operating income: $80.0 billionNet income: $77.7 billionAWS sales: $128.7 billion (+20% YoY)AWS operating income: $45.6 billion (vs. $39.8B in 2024)Operating cash flow: $139.5 billion (+20%)However, one number stands out. Free cash flow dropped sharply to $11.2 billion, largely due to a $50.7 billion surge in capital expenditures tied to AI infrastructure.Amazon's stock performance has also been solid overall, outperforming the broader market in most time frames. Year-to-date, Amazon is up 3.93% compared to the S&P 500 at 0.60%. Over one year, Amazon has gained 29.76%, slightly ahead of the S&P 500’s 28.39%, and over three years it has surged 134.27% versus 66.08%. However, on a five-year basis, Amazon trails the index, rising 41.11% compared to the S&P 500’s 66.27%, according to Yahoo Finance. More Retail:Walmart fires OpenAI in playbook-changing moveCostco CEO just gave members a new reason to renewBath & Body Works makes big change customers will notice right awayLooking ahead, Amazon expects first-quarter 2026 revenue between $173.5 billion and $178.5 billion, or 11% to15% growth compared with the first quarter of 2025. Operating income is also projected between $16.5 billion and $21.5 billion.Amazon is no longer just an e-commerce goliath. It’s now one of the biggest investors in artificial intelligence infrastructure in the world. That creates enormous opportunity, but also higher risk. And that risk part is what brings us to how Wall Street is thinking about Amazon.Related: Goldman Sachs issues brutal jobs warning to American employees