The broader market closed out June 2026 on a high note, with the S&P 500 and Nasdaq posting some of their best quarterly gains in years. But not every mega-cap stock made the trip. Amazon (AMZN) and Meta Platforms (META) both sit well below their 52-week highs heading into July — Amazon trading at $239.79, roughly 13.9% off its peak of $278.56, while Meta has fallen nearly 30% from its high of $796.25 and now trades near $557.15.
For long-term investors, that kind of pullback on two of the most profitable technology businesses on the planet deserves a closer look.
Amazon: AWS Just Flexed Its Pricing Muscle
Amazon's core story heading into the second half of 2026 is simple: AWS has so much AI demand it can raise prices — and it just did. Effective July 1, 2026, AWS increased prices on its EC2 Capacity Block reservations for machine-learning GPU instances by approximately 20%. This marks the second price hike this year, following a roughly 15% increase in January. The company cited supply and demand as the driver.
That kind of pricing power is rare. When a cloud provider can raise rates on its most in-demand AI compute capacity twice in six months, it signals that customers have few alternatives and that AWS holds the leverage. Wells Fargo flagged the move as a bullish catalyst for the stock.
The fundamentals back that confidence. In the first quarter of 2026, Amazon reported revenue of $181.52B, with net income of $30.27B and diluted EPS of $2.78. Operating margins expanded to 13.14%, and gross margins reached 51.82% — both reflecting the growing contribution of the high-margin AWS segment, where cloud revenues grew 28% year over year.
Amazon currently trades at a P/E of 28.68 with trailing EPS of $8.36 and a market cap of roughly $2.58T. Despite those strong numbers, all 14 analysts tracked in the current consensus rate the stock a Strong Buy, with 100% bullish — and an average price target of $323.29, implying roughly 34.82% upside from current levels. The high target from TD Cowen sits at $350.00.
The next major catalyst is Amazon's Q2 2026 earnings report, expected in late July. With AWS GPU pricing up, AI backlog expanding, and advertising revenue continuing to grow, the setup looks compelling.
Meta Platforms: The Market Is Ignoring the Fundamentals
Meta's stock has been one of the more frustrating trades of 2026. The company has announced a flood of AI initiatives — Meta One (a paid AI subscription service), new AI hardware, and expanded data center infrastructure — yet shares have struggled, weighed down by concerns over its $115 to $135 billion capital expenditure guidance for the year.
But step back from the noise and the fundamentals are hard to argue with. In Q1 2026, Meta posted revenue of $56.31B and net income of $26.77B, translating to diluted EPS of $10.44. Gross margins hit 81.85% and net margins reached 47.54% — numbers that are nearly unmatched among large-cap technology companies. Operating margin came in at 40.62%.
That profitability is what makes the current valuation so interesting. Meta trades at just 18.22 times earnings — a remarkably low multiple for a company generating nearly half its revenue as profit. The stock's trailing EPS of $30.58 gives it one of the most attractive earnings yields among its mega-cap peers.
Analysts have not given up on the name. Of the 13 analysts tracked in the current consensus, 92.3% are bullish, with an average price target of $831.15 — roughly 49.18% above where the stock trades today. The high target from Rosenblatt stands at $1,015.00, while the most cautious call sits at $725.00 from JP Morgan, which downgraded the stock to Neutral in late April following the company's heavy capex disclosure.
The bull case rests on Q2 2026 earnings, expected in late July. Meta guided Q2 revenue in the range of $58.00 to $61.00 billion. If the company delivers at the high end and provides encouraging color on AI monetization — particularly Meta One subscriber numbers and advertising performance — the stock could see a sharp re-rating.
The Risk to Keep in Mind
Neither stock is without risk. Amazon's free cash flow has compressed significantly as it pours capital into AI infrastructure. Meta faces ongoing questions about whether its AI spending will generate returns proportional to the investment. And both companies report Q2 earnings in a holiday-shortened week — markets are closed July 4, 2026 — meaning trading volumes entering the reporting window may be thinner than usual, which can amplify volatility in either direction.
Investors buying into this dip should size positions accordingly and treat Q2 earnings as the key inflection point for both names.
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Written by Guest Author