Amazon shares have room to run as AWS AI backlog hits $35B, UBS says Proactive uses images sourced from Shutterstock
Amazon.com Inc (NASDAQ:AMZN) is significantly underappreciated by Wall Street as artificial intelligence commitments pile up in its cloud division, UBS says, maintaining a Buy rating on the stock with a $333 price target.
The bank’s analysis found that Bedrock, Amazon’s AI model platform, carries roughly $35 billion in backlog as of the end of Q1 2026, representing approximately 300% year-over-year growth.
UBS forecasts AI will account for 26% of AWS revenue by the end of 2026, rising to 30% in 2027, underpinned by large contracts signed with both Anthropic and OpenAI.
The firm’s revenue estimate for AWS stands at $175.9 billion for 2026, reflecting 36% year-over-year growth, well ahead of the Street consensus of $166.6 billion and 29% growth.
The divergence centers on the backlog UBS expects AWS to add through 2026 and beyond, currently pegged at $350 billion.
That gap compounds into 2027, where UBS’s operating income estimate runs approximately 40% above consensus. “(W)e believe the Street will continue to catch up to where we are now,” the bank’s analysts wrote.
Beyond AWS, UBS cited several other drivers behind its bullish stance, including accelerating same-day delivery expansion and a push into groceries, improving e-commerce unit economics as volume growth outpaces costs, and growing ad revenue potential from Prime Video as the service scales globally alongside live sports rights.
UBS has previously described Amazon shares as a “coiled spring,” adding that with each quarterly report this year, it expects that thesis to gain further validation.