KeyBanc has increased its forecasts for Amazon's total net sales by less than 1% for 2026 and by 1% for 2027, primarily driven by stronger expectations for Amazon Web Services (AWS) revenue.

The firm now expects AWS to deliver 31% year-over-year revenue growth in both 2026 and 2027. It also raised its operating income forecasts by 4% for 2026 and 8% for 2027, reflecting stronger AWS performance and continued improvement in retail margins. In addition, KeyBanc introduced its first projections for 2028, forecasting $1.079 trillion in net sales and $178.6 billion in operating income.

According to the firm, market consensus continues to underestimate Amazon's long-term growth potential. Its 2028 revenue and earnings per share (EPS) forecasts are 2% and 3% above consensus estimates, respectively. However, ongoing investments in the Project Kuiper satellite initiative and data center expansion could limit further margin expansion in the near term.

KeyBanc continues to rank Amazon as its top e-commerce pick, citing solid retail fundamentals and a clear inflection point in AWS growth.

Looking ahead, Amazon is expected to deliver another strong quarterly performance when it reports Q2 2026 earnings. Citigroup has also reaffirmed its Buy rating on the company, expecting revenue to come in at the upper end of management's guidance, supported primarily by AWS. Citi believes AWS could see additional upside in the third quarter, driven by full-capacity utilization, expanding infrastructure, and pricing improvements.

Meanwhile, Amazon's AWS division is undergoing a leadership transition, with a senior vice president stepping down after 19 years at the company. AWS CEO Matt Garman announced the departure in an internal memo.

Separately, Amazon's satellite internet project, Amazon Leo, has entered into a partnership with South African broadband provider Herotel to deliver broadband connectivity to rural and underserved communities. Commercial services are expected to launch in 2027.

Market Insight:

According to Bank of America, U.S. retail spending rebounded in June, supported in part by Amazon Prime Day and other promotional events. These recent developments highlight Amazon's continued strategic expansion across cloud computing, e-commerce, and satellite communications, reinforcing its strong competitive position and long-term growth outlook.