Here's Why UPS Stock Is Rising and Falling in 2026

UPS (NYSE: UPS) in 2026. It's complicated. The stock is basically flat on the year so far, but that fact goes nowhere near explaining the stock or the company in 2026. April was one of the up months, with a 10.6% performance, according to data from S&P Global Market Intelligence. The move in April came as investors prepared for the first-quarter earnings report at the end of the month, but since then, the stock has declined. Here's why.

Forget about UPS for a moment, because Amazon.com (NASDAQ: AMZN) looms large whenever investors try to take a snapshot of UPS. The reason is twofold. First, UPS is voluntarily reducing the volume of deliveries it makes for Amazon, and for good reason, too. A lot of Amazon-related deliveries are low- or even negative-margin for UPS, not least because they involve deliveries of inefficiently packaged or bulky items to hard-to-find residential addresses.

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As such, the plan to reduce Amazon delivery volume by 50% from the start of 2025 to the middle of 2026 makes perfect sense. The voluntary reduction in volume is impacting UPS in many ways, as Amazon accounted for 11.8% of UPS's total revenue in 2024.

First, revenue naturally declines as the "glidedown" takes place. For example, revenue was just over $91 billion in 2024, then dropped to $88.7 billion in 2025, and even though management expects year-over-year growth to $89.7 billion in 2026 , it still represents a decline from 2024.

Third, Amazon has its own logistics ambitions, and it recently launched Amazon Supply Chain Services (ASCS) to replicate the success of its internal transportation services by offering them to external companies. The threat could be significant for UPS, given that Amazon can target small- and medium-sized businesses that already use Amazon shipping only partially (Amazon sellers) or don't ship via Amazon at all.

All of it leads to a confusing picture for UPS in 2026: near-term margin pressure in the first half is expected to be followed by a second-half recovery, with management maintaining its full-year guidance of $89.7 billion in revenue and an adjusted operating margin of 9.6%.

One cause of doubt about those projections is that two-thirds of the 8% decline in U.S. domestic package volume in the first quarter was due to the Amazon glidedown, according to the Dykes. In other words, the volume decline isn't just due to Amazon. Moreover, fuel and third-party transportation costs rose in the quarter, even as overall revenue declined. Throw in the risk from ASCS, and UPS faces challenges in 2026.

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Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and United Parcel Service. The Motley Fool has a disclosure policy.

Here's Why UPS Stock Is Rising and Falling in 2026 was originally published by The Motley Fool