Wall Street analyst projects Amazon could hit $4 trillion valuation by 2027

A Wall Street analyst has projected that Amazon could increase its market capitalisation by 50% over the next 12 months, potentially reaching a $4 trillion valuation by 2027. This forecast comes as the company trades at a significant discount to its historical averages, currently sitting at under 30 times trailing-12-month earnings, a level near a 10-year low. While the stock has underperformed the S&P 500 with a 7% year-to-date increase, the long-term outlook remains robust, driven by sustained growth in Amazon Web Services (AWS) and continued dominance in US e-commerce.

AWS sales grew 28% year-on-year in the first quarter of 2026, marking the highest growth rate in 15 quarters. This acceleration is largely attributed to the rapid adoption of artificial intelligence platforms, with spending on the Bedrock building platform increasing 170% sequentially in the first quarter of 2026. Additionally, the number of developers using the Kiro coding tool more than doubled during the same period. CEO Andy Jassy noted the unprecedented speed of AI adoption, stating the company has never seen a technology grow as rapidly as artificial intelligence.

The company’s core e-commerce engine continues to expand, accounting for more than 60% of total sales in the first quarter. Amazon recently surpassed Walmart to become the largest company in the world by sales, leveraging its control over more than 40% of the US e-commerce market. To support this dominance, the company is aggressively expanding its logistics network, aiming to offer same-day delivery in 4,500 US cities by the end of the year, alongside one-hour delivery in hundreds of markets.

Beyond cloud and retail, Amazon is diversifying through new ventures such as Amazon Leo, formerly Project Kuiper. The space-based internet service has already secured deals with Delta Airlines for in-flight Wi-Fi and Apple for use in Apple Watches and other products. These developments, combined with ongoing acquisitions, underscore the company’s strategy to integrate technology across multiple sectors, although the stock has seen limited upside in the short term due to market concerns over AI overspending.

Short-term profitability faces pressure from significant capital expenditure on AI infrastructure, with management guiding for only slight operating income growth in the second quarter. While a $4 trillion valuation would require net income to increase by 50% if the price-to-earnings ratio remains constant, the consensus analyst target price implies a 30% gain, approaching a $3.5 trillion valuation. This more moderate scenario is considered more probable, reflecting the balance between long-term growth potential and near-term financial constraints.