Prediction: The Dip in Amazon Stock Is a Buying Opportunity and the Stock Will End 2026 Higher

Amazon (NASDAQ: AMZN) shares sank contempt the institution reporting beardown fourth-quarter results, arsenic it volition put aggressively successful its Amazon Web Services (AWS) unreality computing business. The banal is present down much than 10% twelvemonth to date. However, my prediction is that this dip volition beryllium a large buying accidental for semipermanent investors and that the banal volition extremity the twelvemonth higher.

Let's instrumentality a person look astatine the e-commerce giant's latest results and prospects, and wherefore the banal looks similar a buy.

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AWS is some Amazon's largest conception by profitability and its fastest-growing. The conception saw its gross maturation accelerate successful the quarter, with AWS gross climbing 24% to $35.58 billion. It was the fastest gait of maturation successful much than 3 years for AWS, and up of the $34.93 cardinal gross statement arsenic compiled by StreetAccount. AWS' operating income, meanwhile, roseate 18% to $12.5 billion.

Amazon credited the maturation to beardown request for artificial quality (AI) infrastructure, but besides said that halfway non-AI workloads were stronger than expected. It called retired its AI solutions arsenic besides helping thrust growth, saying Bedrock spending surged 60% sequentially. It besides said it is seeing beardown request for its customized Trainium chips and expects commitments for the chips to beryllium sold retired by mid-year.

Like different hyperscalers, Amazon decided to greatly ramp up its superior expenditure (capex) spending for 2026, with plans to instrumentality it from $132 cardinal successful 2025 to $200 cardinal this year. Much of this volition spell toward AI information centers, but immoderate of the spending volition besides spell toward robotics and Project Kuiper (low-earth-orbit satellites).

On the user broadside of its business, Amazon's North America income jumped by 10% twelvemonth implicit twelvemonth to $127.1 billion, portion planetary income climbed 17%, oregon 11% successful changeless currencies, to $50.7 billion. Advertising continues to assistance thrust growth, with its advertisement gross rising 22% to $21.3 billion, led by its sponsored advertisement business.

The institution continued to spot beardown operating leverage successful its North American e-commerce operations, with its operating income for its North American conception surging 24% to $7.3 billion. Its planetary conception posted operating income of $1 cardinal versus $1.3 cardinal a twelvemonth ago, but was wounded by a fig of one-time charges.

Overall, Amazon's gross accrued by 14% twelvemonth implicit twelvemonth to $213.39 billion, which came successful supra the $211.33 cardinal expert consensus, arsenic compiled by LSEG. Earnings per stock roseate 5% to $1.95, which missed expert expectations of $1.97. However, this is not the emblematic adjusted net per stock fig that astir companies provide. It includes immoderate one-time charges, specified arsenic the solution of a taxation substance and plus impairment.