Amazon seen as undervalued despite AI capex concerns: Jefferies

Amazon.com Inc (NASDAQ:AMZN) whitethorn connection investors important upside contempt concerns implicit near-term superior expenditures and comparative AWS growth, according to analysts astatine Jefferies.

The steadfast highlighted that Amazon shares person “been a frustrating laggard arsenic sentiment faded connected outsized AI capex and trailing AWS maturation versus peers.”

Leading indicators, specified arsenic backlog maturation and long-duration AI commitments, suggest a imaginable re-acceleration arsenic caller capableness comes online, Jefferies believes.

Jefferies emphasized that Amazon’s banal is trading astatine 1 of the lowest large-cap net multiples, astatine 11x 2026 EV/EBITDA, compared with an mean of 14x for peers.They judge that this valuation is “too inexpensive for what it is,” pointing retired that Amazon has matched Walmart successful retail gross merchandise measurement portion delivering higher maturation and margins, yet trades astir 10 turns beneath Walmart’s EV/EBITDA.

The analysts outlined respective factors weighing connected the stock. Amazon’s projected fiscal twelvemonth 2026 superior expenditure of astir $200 billion, a 56% summation year-over-year, reflects request for AI infrastructure and is expected to temporarily make antagonistic escaped currency flow. Jefferies described this arsenic “a timing issue, not a structural oregon imperishable one,” noting that arsenic capableness ramps, escaped currency travel should recover.

AWS maturation has besides lagged down competitors specified arsenic Microsoft Azure and Google Cloud Platform. Jefferies noted, however, that “AWS is poised to accelerate, supported by rising backlog conversion, multi-billion-dollar AI gross run-rate, and a amended endeavor request mix.”

Despite skepticism astir Amazon’s AI positioning, the analysts highlighted that the company’s “full-stack, model-agnostic level is built for endeavor AI astatine scale, adjacent if it lacks header optics today.”

In retail, analysts wrote that concerns that AI-driven agentic commerce could bypass Amazon’s level are mitigated by the company’s power of execution, fulfillment, and conversion-proximate intent.

Jefferies besides highlighted longer-term maturation drivers, including Amazon’s planetary AWS and advertizing opportunities, ongoing concern successful fulfillment and content, and its quality to grow into caller products, services, and geographies.

The steadfast maintained a Buy standing connected Amazon, with a base-case 12-month terms people of $300, implying upside of 46% astatine the clip of writing. An upside script could spot shares scope $330, portion a downside script puts the banal astatine $160.