Amazon has been named as the top pick among large cap internet companies by UBS Equity Research, and for good reason. Analyst Stephen Ju believes that the company’s earnings power is still underpriced, with his bottom-up revisions pointing to stronger backlog and demand driving 36% growth in 2026 alone. Additionally, Ju’s 2027 operating income forecast is around 40% above consensus, indicating a significant upside potential for the stock.

Ju’s optimism towards Amazon stems from his belief that the company’s AWS segment is poised for continued growth and profitability. He notes that the company has been embedding more conservative growth and margin expectations than what is implied by consensus forecasts, which could lead to a catch-up in valuation as new partnerships are announced, such as OpenAI and Anthropic YTD. Furthermore, Ju highlights that his 30x P/FCF valuation is conservative given the lack of reflection of incremental revenue from initiatives like Amazon Leo, which could further support multiple expansion and upside to his price target.

Ju’s analysis suggests that Amazon has a robust growth engine, with its AWS segment being a key driver of earnings power. The company’s focus on innovation and partnerships has created a strong foundation for future growth, and Ju believes that the stock is undervalued compared to its peers. With his 35% upside potential, Ju’s analysis provides a compelling case for investors to consider Amazon as their top pick among large cap internet companies.