Amazon is entering its fourth-quarter earnings period with improving investor confidence, supported by a strong performance in the previous quarter and growing optimism around its cloud computing division, Amazon Web Services (AWS).

Cloud momentum has been a key driver of sentiment, with AWS growth coming in ahead of expectations and clear signs that demand remains resilient as capacity continues to expand.

Commenting on the outlook, Lale Akoner, Global Market Analyst, said:
“Momentum in AWS has been a major positive for Amazon, with cloud growth exceeding expectations and demand remaining healthy as capacity scales. This has played an important role in strengthening investor confidence heading into the fourth quarter.”

Looking ahead, 2026 is expected to be a pivotal year for AWS, particularly as AI-related workloads continue to scale. Investors are increasingly focused on whether accelerating cloud growth can translate into stronger earnings momentum and support a higher valuation. At current levels, Amazon shares trade at a relatively modest multiple of long-term earnings, further contributing to the improving sentiment.

Beyond cloud, market attention is also centred on Amazon’s path to higher profitability. This includes potential operating margin expansion, continued discipline around capital expenditure, and sustained growth in the advertising business.

Over the longer term, additional upside could come from logistics automation, broader monetisation of AI across consumer products, new revenue streams such as satellite internet, and the potential for future Prime subscription price increases.