Amazon Web Services' Margins to Drive Higher Earnings Forecasts, UBS Says

01:07 PM EDT, 10/26/2026 (MT Newswires) -- Amazon (AMZN) Web Services' operating margins could exceed investor expectations as revenue grows, potentially driving higher earnings and free cash flow forecasts for 2027 and beyond, UBS said in a note Monday. Amazon is set to report Q3 results on Thursday. The brokerage said its operating margin forecast for AWS remains above consensus expectations. UBS expects investors to raise their margin forecasts as Amazon reports successive quarters, supporting higher earnings and free cash flow estimates. The brokerage also cited the potential for accelerating AWS growth as capacity expands, market share gains from same-day delivery and grocery offerings, improving e-commerce margins, and higher-margin advertising revenue from Prime Video. UBS maintained the company's buy rating and raised its price target to $348 from $318. Price: 248.90, Change: +0.90, Percent Change: +0.36