NEW YORK, Jan 26, 2026, 17:43 EST — After-hours
- Shares of Amazon fell Monday as traders digested a mix of legal challenges and earnings reports
- Amazon’s retail practices drew renewed scrutiny following a $309 million U.S. returns-refund settlement
- Roth Capital raised its price target on AMZN following AWS’s new customer contract in the UK
Amazon.com shares slipped 0.3% on Monday and barely moved in after-hours trading. Investors weighed a new legal settlement alongside an upbeat analyst note ahead of the company’s upcoming quarterly report.
The timing is crucial. U.S. markets face a busy week with a Federal Reserve rate decision on deck, plus earnings reports from major tech giants that typically influence risk sentiment.
Amazon’s next few sessions hinge on one key factor: margins. Investors want to see if the retail side can control costs while the company pours money into data centers and AI. At the same time, attention is on whether Amazon Web Services can keep expanding without slashing prices too much.
Amazon has agreed to shell out $309 million and offer additional relief to resolve a class action brought by U.S. customers who claimed they were wrongly denied refunds after returning products. Plaintiff lawyers have urged a federal judge in Seattle to greenlight the deal, arguing it delivers over $1 billion in value when factoring in refunds and non-monetary changes to return and refund policies. Amazon, however, denies any wrongdoing.
Roth Capital’s Rohit Kulkarni bumped his Amazon price target to $295 from $270, maintaining a Buy rating ahead of the company’s Q4 results due next week. Kulkarni highlighted possible “margin relief” and flagged upcoming developments involving Trainium 3, Amazon’s in-house AI chip, its shopping assistant Rufus, and updates on AWS and OpenAI. TipRanks
AWS scored a customer win in Europe as Nationwide Building Society expanded its deal with the cloud giant. Nationwide Group COO Suresh Viswanathan said the move aims to accelerate cloud-based digital services, emphasizing technology that enhances customer experience while “keeping safety and security at the forefront.” businesschief.com
Alison Kay, AWS’ vice president and managing director for the UK and Ireland, said the initiative will help Nationwide accelerate product updates without loosening compliance. She also noted that consolidating workloads can “accelerate innovation” and boost operational resilience. FinTech Magazine
The broader market showed strength. The S&P 500 climbed 0.5% Monday, while the Nasdaq added 0.4%. That made Amazon’s drop stand out as more of an isolated issue than a sign of wider weakness.
Up next: the Fed’s two-day policy meeting on Jan. 27-28. Most investors are betting the central bank will keep rates unchanged. Still, the decision carries weight for mega-cap tech stocks, since rate forecasts directly influence how the market prices long-term cash flows.
Amazon’s upcoming quarterly report and earnings call on Feb. 5 will draw investor attention, especially around AWS growth compared to cloud competitors, retail operating leverage, and clues on 2026 AI infrastructure spending.
Risks remain on both fronts. The returns settlement still requires court approval, and the cash outlay plus process shifts might keep returns and customer service costs in focus. A weaker consumer backdrop or harsher cloud pricing could pressure those very line items driving investor expectations for growth.
Traders are zeroing in on the Fed’s Jan. 28 decision to gauge sentiment around growth stocks. After that, all eyes shift to Amazon’s earnings and guidance on Feb. 5 to keep the narrative moving.
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