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Shares of Amazon.com Inc. (NASDAQ: AMZN) finished 2025 in a frustrating manner. After hitting an all-time high in November, the stock quickly retreated and ultimately ended the year essentially flat, a disappointing outcome given that the S&P 500 index gained 17% over the same timeframe. 

The start of 2026 did little to inspire confidence. A sharp drop of nearly 2% on the first trading day of the year raised concerns around the start of a downtrend, but over the past week, the tone has shifted decisively.

Amazon has surged as much as 9% over the last three sessions, pushing back to its highest levels since mid-November and reclaiming technical ground it had struggled to hold in the weeks since then. After months of lacklustre performance, Amazon is starting to act like a stock with something to prove. Let’s take a look at what this could mean for its performance in 2026. 

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Why Momentum Is Building Again

Amazon’s sudden strength is not coming out of nowhere. One of the most consistent features of the stock over the past years has been its ability to deliver at earnings time. Quarter after quarter, Amazon has topped analyst expectations in all the right places, reinforcing confidence in its ongoing execution even when the stock performance doesn’t necessarily reflect it.

That pattern matters all the more right now because its next earnings report is due at the end of January. Historically, Amazon's stock has often rallied higher in anticipation of earnings, especially when the prior positioning has been cautious.

With this momentum suddenly appearing, the setup looks familiar. If confidence continues to build over the next few weeks, a pre-earnings run-up would not be surprising.

Ongoing analyst support, a factor highlighted in the past, is another tailwind. This week, the team at Wolfe Research reiterated its Outperform rating with a $275 price target, while the team at Jefferies maintained its Buy rating and increased its target to $300.

With Amazon currently trading around $240, that’s a solid 25% in potential upside to start the year. 

AWS And the AI Narrative Are Back in Focus

A major driver of the optimism behind these updates is Amazon Web Services (AWS). In its most recent report, AWS posted 20% year-over-year revenue growth, its fastest pace in nearly three years. 

That shift has not gone unnoticed. For much of the past year, the AI narrative around AWS lagged competitors, weighing on sentiment despite solid execution. Recently, that narrative has flipped. Investors are increasingly viewing AWS as a beneficiary rather than a bystander in the AI wave, a shift that is surely underpinning much of this renewed momentum.

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Additional Reasons to Be Excited for 2026

Beyond AWS, Amazon enters 2026 with a long list of potential catalysts that should further support the share price. Analysts continue to point to opportunities across grocery, Amazon Pharmacy, Trainium chips, and its Amazon for Business segment. None of these needs to dominate the story for the stock to work. They simply add layers of additional upside potential that become all the more exciting when the core businesses are firing.

This breadth is part of what makes Amazon’s current setup so interesting. After a year of much consolidation and not a little frustration, the stock is starting 2026 with fresh momentum, bullish sentiment, and multiple levers it can pull as the year unfolds.

What This Means for Investors

For now, at least, Amazon does not need to be perfect; it just needs to be consistent. The good news is that after finishing 2025 flat, expectations are relatively modest. If this momentum carries into the coming weeks, a strong earnings report at the end of the month could be enough to propel the stock back toward November’s highs and beyond.

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