Amazon’s Post-Q2 Earnings Rally Has Faded But Don’t Give Up on AMZN Stock Just Yet

After Nvidia's Q2 2027 earnings, the Magnificent 7 stocks season concluded with Amazon (AMZN) and Microsoft (MSFT) leading the pack with double-digit gains. Amazon's Q3 guidance, however, fell short of estimates, and the company announced a 10% increase in its 2026 capital expenditure budget to $220 billion. Amazon has also pledged to purchase more Nvidia GPUs in the coming years, indicating a continuous investment in AI infrastructure.

Despite these gains, Amazon's post-earnings rally has weakened, and analysts question the sustainability of its spending in AI. Amazon's e-commerce business faces headwinds as competitors like Walmart report challenging quarterly results. Analysts are generally bullish on Amazon, with a Strong Buy consensus rating from 57 of the 57 tracked analysts.

The stock's mean target price of $326.49 is 23% higher than its current level. Despite concerns over AI spending and retail slowdown, Amazon's strong ecosystem and potential for growth in AI-driven services make it an attractive investment opportunity.