Amazon (NASDAQ:AMZN) stock opened 2026 amid renewed discussion around workforce reductions, but the stock has shown little sign of stress. Despite some headlines resurfacing around potential layoffs, shares closed the first full trading week of the year up ~6%.
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The muted reaction makes more sense once you filter out the rumors and stick to what Amazon has actually said. The company confirmed in late 2025 that it was eliminating about 14,000 corporate roles, or roughly 4% of its non-warehouse workforce, as part of a broader efficiency push. Reports pointing to far deeper cuts – in some cases as many as 30,000 positions – continue to circulate, but those figures have not been officially backed by Amazon.
For a company operating at Amazon’s scale, investors tend to view cost reductions as a lever for margin expansion rather than a signal of distress. With consensus fiscal 2026 EPS estimates hovering around $7.85, the real question is whether these efficiency gains can translate into higher earnings without sacrificing execution – and that is where the focus shifts to AWS.
One of the most optimistic voices on the Street belongs to Mizuho analyst Lloyd Walmsley, who sees Amazon’s cloud business entering a new phase of AI-driven growth. Walmsley, who’s ranked among the top 2% on Wall Street, argues that investor expectations for AWS remain too conservative, particularly as AI workloads evolve. In his view, the industry is moving away from training-heavy demand toward inference, a shift that plays directly to AWS’s strengths in custom silicon and cost-efficient infrastructure.
Walmsley believes Amazon’s AI-related revenue could double in 2026, reaching about $17 billion, as inference adoption accelerates and capacity constraints ease. The top analyst also points to Amazon’s expanding lineup of custom chips, including Trainium and Graviton, as a key advantage, helping customers lower costs while scaling AI workloads. In his words, AWS is increasingly positioned to “support AI at scale” in a way that few competitors can match.
Importantly, Walmsley expects this momentum to extend beyond a single year. As more enterprises migrate legacy workloads to the cloud and layer AI capabilities on top, AWS growth could re-accelerate through the second half of 2026 and beyond.
That combination of cloud migration, AI inference, and operating leverage underpins Walmsley’s Outperform (i.e., Buy) rating on AMZN shares, while his $300 price target implies 27% upside. (To watch Walmsley’s track record, click here)
Walmsley is hardly the only analyst impressed with Amazon. The stock has 46 Buy recommendations and just 1 Hold, earning it a Strong Buy consensus rating. The $294.55 average price target suggests 19% upside potential in the coming months. (See AMZN stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.