Wells Fargo Names Top Pick Ahead of Q3 Earnings

Wells Fargo has identified Amazon as its top long idea heading into third-quarter earnings, citing expected positive revisions to Amazon Web Services revenue and operating income.

The investment bank highlighted Amazon as its favorite mega-cap stock for the third quarter, driven by anticipated AWS revenue acceleration and strong margins. Wells Fargo expects AWS to drive positive revisions despite some near-term operating income risk related to fuel costs and longer-term questions surrounding agentic commerce.

Wells Fargo named Amazon its top long position into third-quarter earnings, expecting another positive revision to AWS revenues and operating income. The firm views Amazon as the preferred mega-cap stock for the quarter, driven by AWS revenue acceleration and strong margin performance.

While acknowledging some near-term operating income risks from fuel costs and longer-term uncertainties around agentic commerce, Wells Fargo maintains its bullish stance on the stock.

The firm noted that Amazon's setup appears more straightforward compared to other mega-cap technology names, where hedge fund positioning and other factors create additional complications. Wells Fargo also acknowledged strength in the broader eCommerce industry but remained cautious on other players in the space, suggesting Amazon stands out as the clearest opportunity heading into earnings season.

The firm's analysis suggests AWS will be the key driver of positive estimate revisions following the quarterly report. Wells Fargo's confidence in Amazon reflects expectations that the cloud computing division will continue to show accelerating growth, supporting the overall investment thesis despite potential headwinds in other parts of the business.