Amazon (AMZN) stock closed at $232.14 on Tuesday, up 4% over the past five trading sessions. Meanwhile, Magnificent-7 stock rival Alphabet (GOOGL) rose just 2% over the same period, closing Tuesday at $314. GOOGL took the honor of seventh place in 2025, but thanks to AI competition, the grouping became even tighter in the second half of the year. All groups have invested heavily in AI this year, resulting in a significant increase in investor interest. Amazon stock has been a consistent buy this year, but enters 2026 slightly behind Alphabet (GOOGL). Fortunately, that trend may well change next year.
Year-to-date, AMZN is up just 5%, but this is largely due to a slump in the spring when most US stocks fell sharply. Amazon has plenty of potential in 2026, as the AI outlook is booming and AWS cloud computing looks promising. As a result, AMZN stock forecasts have a range of bullish predictions. In fact, the current price target ranges from $244 to $340, indicating upside potential from the current market price of $232.
Trust Securities analyst Youssef Squali expects Amazon to grow from 12.1% in 2025 to 10.5% in 2026, driven by strong growth drivers and AI-driven services. Amazon’s proposed deal with OpenAI could be a valuable catalyst that drives AMZN stock higher next year. In fact, the e-commerce giant is in talks for a potential $10 billion investment with Sam Altman’s OpenAI, which hosts the world’s top AI platform ChatGPT. The talks also indicate that OpenAI may use Amazon’s internal Trainium chip as part of the offer. If the deal goes through, it would be a major step forward for Amazon’s relatively young semiconductor business.
Meanwhile, Alphabet (GOOGL) has been getting a lot of attention lately thanks to its in-house tensor processing unit (TPU). Several experts predict that Alphabet’s TPU could become a major revenue driver driving GOOGL stock higher. These application-specific chips have long been the backbone of Google Cloud, and investors are starting to take notice of the idea that selling them externally could be a lucrative extension of that strategy. Analysts point to recent momentum, including Alphabet pledging to supply Anthropic with tens of billions of dollars in TPUs and reports that Meta may be in talks to spend billions.
Much of Amazon’s lackluster recent performance can be tied to the growth of AWS, which has lagged behind Microsoft Azure and Google Cloud. However, Amazon saw AWS revenue growth accelerate to 20% last quarter and is constrained by production capacity, the company said. Therefore, the company is increasing its capital investment (Capex) budget in order to respond to rising demand. This could mean a solid start to the year, setting the pace for AMZN to catch up with GOOGL in the AI race.
