BofA Reiterates Buy Rating on Amazon Amid AWS Expansion
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Should l Buy AMZN?
Source: Benzinga
- AWS Expansion Momentum: The analyst noted that Amazon Web Services (AWS) has doubled its power capacity since 2022 and plans to double it again by 2027, with revenue growth accelerating to 24% year-over-year in Q4 2025.
- Revenue Growth Potential: Based on historical capex data, AWS power capacity is expected to exceed 31 gigawatts by the end of 2027, and with each additional gigawatt generating approximately $5.4 billion, projected revenues could reach $164 billion in 2026 and $209 billion in 2027, surpassing market expectations.
- Cost Increase Risks: The analyst warned that rising construction costs and potential industry overbuild could pressure revenue projections, estimating hyperscalers may spend $1.2 trillion in capex over the next two years, which could intensify cloud pricing competition.
- Market Sentiment Outlook: Despite Amazon's stock falling 6% since its Q4 earnings report, the analyst believes sentiment could improve if AWS growth re-accelerates, Trainium adoption expands, and Amazon signs more AI capacity deals.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy AMZN?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise
44 Analyst Rating
41 Buy
3 Hold
0 Sell
Strong Buy
Current: 210.640
Low
175.00
Averages
280.01
High
325.00
Current: 210.640
Low
175.00
Averages
280.01
High
325.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Amazon's Stock Decline Driven by AI Investment Concerns
- Surging Capital Expenditures: Amazon's projected capital expenditures for 2026 are set to reach $200 billion, significantly exceeding analyst expectations of $150 billion, which has raised market concerns and led to a 15% drop in stock price in February.
- Free Cash Flow Pressure: Amazon's free cash flow plummeted by 71% in 2025, falling from $38.2 billion in 2024 to just $11.2 billion, primarily due to ongoing AI investments, prompting Wall Street to question the prudence of its capital allocation.
- Strong AWS Growth: Despite capital expenditure pressures, Amazon Web Services (AWS) reported $35.6 billion in revenue for Q4 2025, marking a 24% year-over-year growth, indicating robust profitability and demand in the AI sector.
- Long-Term Investment Outlook: While free cash flow may continue to decline in the short term, Amazon's investments in AI infrastructure are expected to yield long-term benefits, particularly through its partnership with Anthropic, enhancing its competitive position in the AI market.
See More
Amazon Could Join $3 Trillion Club in Less Than Two Years
- Cloud Growth: Amazon's AWS generated $128.7 billion in total revenue for 2025, with year-over-year growth accelerating from 17% in Q1 to 24% in Q4, indicating strong demand for AI services will drive future revenue growth.
- Logistics Efficiency: In 2025, Amazon delivered a record 8 billion packages to Prime members in the U.S., a 30% increase year-over-year, by optimizing its logistics network to shorten order travel distances, thereby speeding up delivery times and reducing fulfillment costs.
- Enhanced Profitability: Amazon achieved a net income of $77.6 billion in 2025, up 31% year-over-year, with earnings per share reaching $7.17, and despite a broader tech sell-off, its P/E ratio remains lower than that of the Nasdaq-100, indicating relative stock value.
- Future Growth Potential: Wall Street estimates Amazon's earnings per share will rise to $7.75 in 2026 and $9.39 in 2027, suggesting that if aligned with Nasdaq-100 P/E ratios, Amazon's market cap could reach $3.14 trillion by the end of 2027, showcasing strong market prospects.
See More
Ark Invest Executes Major Trades in Tech Stocks
- Amazon Trade Dynamics: Ark Invest executed significant trades involving Amazon (NASDAQ:AMZN), although specific transaction details were not disclosed, the company's market performance continues to attract investor attention, indicating confidence in its future growth.
- Baidu Earnings Impact: Baidu (NASDAQ:BIDU) reported a 4% year-over-year revenue decline in its quarterly results; however, the company's ongoing investments in AI highlight its commitment to future technological advancements, which may influence its stock performance.
- Salesforce Stock Transaction: The ARKW fund sold 15,622 shares of Salesforce (NYSE:CRM), valued at approximately $3.1 million, and following the robust fourth-quarter results, Salesforce's stock surged 4.03%, reflecting market recognition of its growth potential.
- Other Key Trades: The ARKF fund purchased 52,974 shares of Nu Holdings Ltd. (NU), while the ARKG fund sold 680,826 shares of Butterfly Network Inc. (BFLY), indicating Ark Invest's strategic adjustments across various tech sectors.
See More
Amazon Poised to Exceed $3 Trillion Valuation
- Accelerated Cloud Growth: Amazon Web Services (AWS) achieved total revenue of $128.7 billion in 2025, with year-over-year growth accelerating from 17% in Q1 to 24% in Q4, indicating strong demand for AI services that is expected to further drive overall revenue growth for the company.
- Significant Order Backlog: AWS ended 2025 with a staggering $244 billion order backlog, up 40% year-over-year, reflecting robust market demand for its services, prompting Amazon to plan a $200 billion investment in 2026 to expand infrastructure and meet customer needs.
- Improved E-commerce Profitability: Although e-commerce accounted for only 18% of Amazon's total revenue of $716.9 billion, it contributed 57% of operating income, with net income reaching $77.6 billion in 2025, a 31% increase, showcasing the company's success in enhancing logistics efficiency.
- Substantial Stock Potential: With a current market cap of $2.3 trillion, if Amazon's stock rises by 42.9% by 2027 to align with the Nasdaq-100's P/E ratio, its valuation could reach $3.14 trillion, indicating a strong potential for joining the $3 trillion club within the next two years.
See More
Walmart's E-commerce Growth Surges, Remains Competitive
- E-commerce Sales Surge: Walmart's total revenue increased by 5.6% year-over-year in Q4, driven by a 24% rise in e-commerce sales, indicating strong performance in its digital transformation, even as it trails Amazon, showcasing significant growth potential in its e-commerce segment.
- Rapid Delivery Advantage: In the fiscal Q4 of 2026, 35% of store-fulfilled orders were delivered within three hours, leveraging its network of 5,200 stores, with 90% of the U.S. population living within 10 miles of a store, enhancing customer experience and competitive positioning.
- Advertising and Membership Revenue Growth: Walmart's advertising sales rose by 37% year-over-year in Q4, while membership fee income increased by 15%, which not only boosts profitability but also indicates ongoing expansion in high-margin areas, further strengthening the company's financial health.
- Long-term Growth Potential: Despite a lukewarm market reaction to management's outlook, Walmart anticipates continued strong growth in e-commerce, and with its extensive store network and discount pricing strategy, it is well-positioned to keep rewarding shareholders in the future.
See More
Walmart's E-commerce Sales Surge Rapidly
- E-commerce Growth: Walmart's total revenue increased by 5.6% year-over-year in the fourth quarter, driven by a 24% surge in e-commerce sales, indicating strong performance in its digital transformation despite some market disappointment regarding its outlook.
- Delivery Advantage: With distribution hubs in 5,200 U.S. stores and 90% of the U.S. population living within 10 miles, Walmart delivers 35% of store-fulfilled orders within three hours, enhancing customer experience and strengthening market competitiveness.
- Profitability Boost: Advertising sales rose by 37% year-over-year, and membership fee income increased by 15%, indicating that these higher-margin segments are driving Walmart's overall profitability and showcasing the success of its e-commerce model.
- Market Position Shift: Although Walmart has been surpassed by Amazon in sales, its unique advantages in the e-commerce space and robust growth potential continue to make it an attractive option for investors.
See More
Amazon's Stock Decline Driven by AI Investment Concerns
- Surging Capital Expenditures: Amazon's projected capital expenditures for 2026 are set to reach $200 billion, significantly exceeding analyst expectations of $150 billion, which has raised market concerns and led to a 15% drop in stock price in February.
- Free Cash Flow Pressure: Amazon's free cash flow plummeted by 71% in 2025, falling from $38.2 billion in 2024 to just $11.2 billion, primarily due to ongoing AI investments, prompting Wall Street to question the prudence of its capital allocation.
- Strong AWS Growth: Despite capital expenditure pressures, Amazon Web Services (AWS) reported $35.6 billion in revenue for Q4 2025, marking a 24% year-over-year growth, indicating robust profitability and demand in the AI sector.
- Long-Term Investment Outlook: While free cash flow may continue to decline in the short term, Amazon's investments in AI infrastructure are expected to yield long-term benefits, particularly through its partnership with Anthropic, enhancing its competitive position in the AI market.
See More
Amazon Could Join $3 Trillion Club in Less Than Two Years
- Cloud Growth: Amazon's AWS generated $128.7 billion in total revenue for 2025, with year-over-year growth accelerating from 17% in Q1 to 24% in Q4, indicating strong demand for AI services will drive future revenue growth.
- Logistics Efficiency: In 2025, Amazon delivered a record 8 billion packages to Prime members in the U.S., a 30% increase year-over-year, by optimizing its logistics network to shorten order travel distances, thereby speeding up delivery times and reducing fulfillment costs.
- Enhanced Profitability: Amazon achieved a net income of $77.6 billion in 2025, up 31% year-over-year, with earnings per share reaching $7.17, and despite a broader tech sell-off, its P/E ratio remains lower than that of the Nasdaq-100, indicating relative stock value.
- Future Growth Potential: Wall Street estimates Amazon's earnings per share will rise to $7.75 in 2026 and $9.39 in 2027, suggesting that if aligned with Nasdaq-100 P/E ratios, Amazon's market cap could reach $3.14 trillion by the end of 2027, showcasing strong market prospects.
See More
Ark Invest Executes Major Trades in Tech Stocks
- Amazon Trade Dynamics: Ark Invest executed significant trades involving Amazon (NASDAQ:AMZN), although specific transaction details were not disclosed, the company's market performance continues to attract investor attention, indicating confidence in its future growth.
- Baidu Earnings Impact: Baidu (NASDAQ:BIDU) reported a 4% year-over-year revenue decline in its quarterly results; however, the company's ongoing investments in AI highlight its commitment to future technological advancements, which may influence its stock performance.
- Salesforce Stock Transaction: The ARKW fund sold 15,622 shares of Salesforce (NYSE:CRM), valued at approximately $3.1 million, and following the robust fourth-quarter results, Salesforce's stock surged 4.03%, reflecting market recognition of its growth potential.
- Other Key Trades: The ARKF fund purchased 52,974 shares of Nu Holdings Ltd. (NU), while the ARKG fund sold 680,826 shares of Butterfly Network Inc. (BFLY), indicating Ark Invest's strategic adjustments across various tech sectors.
See More
Amazon Poised to Exceed $3 Trillion Valuation
- Accelerated Cloud Growth: Amazon Web Services (AWS) achieved total revenue of $128.7 billion in 2025, with year-over-year growth accelerating from 17% in Q1 to 24% in Q4, indicating strong demand for AI services that is expected to further drive overall revenue growth for the company.
- Significant Order Backlog: AWS ended 2025 with a staggering $244 billion order backlog, up 40% year-over-year, reflecting robust market demand for its services, prompting Amazon to plan a $200 billion investment in 2026 to expand infrastructure and meet customer needs.
- Improved E-commerce Profitability: Although e-commerce accounted for only 18% of Amazon's total revenue of $716.9 billion, it contributed 57% of operating income, with net income reaching $77.6 billion in 2025, a 31% increase, showcasing the company's success in enhancing logistics efficiency.
- Substantial Stock Potential: With a current market cap of $2.3 trillion, if Amazon's stock rises by 42.9% by 2027 to align with the Nasdaq-100's P/E ratio, its valuation could reach $3.14 trillion, indicating a strong potential for joining the $3 trillion club within the next two years.
See More
Walmart's E-commerce Growth Surges, Remains Competitive
- E-commerce Sales Surge: Walmart's total revenue increased by 5.6% year-over-year in Q4, driven by a 24% rise in e-commerce sales, indicating strong performance in its digital transformation, even as it trails Amazon, showcasing significant growth potential in its e-commerce segment.
- Rapid Delivery Advantage: In the fiscal Q4 of 2026, 35% of store-fulfilled orders were delivered within three hours, leveraging its network of 5,200 stores, with 90% of the U.S. population living within 10 miles of a store, enhancing customer experience and competitive positioning.
- Advertising and Membership Revenue Growth: Walmart's advertising sales rose by 37% year-over-year in Q4, while membership fee income increased by 15%, which not only boosts profitability but also indicates ongoing expansion in high-margin areas, further strengthening the company's financial health.
- Long-term Growth Potential: Despite a lukewarm market reaction to management's outlook, Walmart anticipates continued strong growth in e-commerce, and with its extensive store network and discount pricing strategy, it is well-positioned to keep rewarding shareholders in the future.
See More
Walmart's E-commerce Sales Surge Rapidly
- E-commerce Growth: Walmart's total revenue increased by 5.6% year-over-year in the fourth quarter, driven by a 24% surge in e-commerce sales, indicating strong performance in its digital transformation despite some market disappointment regarding its outlook.
- Delivery Advantage: With distribution hubs in 5,200 U.S. stores and 90% of the U.S. population living within 10 miles, Walmart delivers 35% of store-fulfilled orders within three hours, enhancing customer experience and strengthening market competitiveness.
- Profitability Boost: Advertising sales rose by 37% year-over-year, and membership fee income increased by 15%, indicating that these higher-margin segments are driving Walmart's overall profitability and showcasing the success of its e-commerce model.
- Market Position Shift: Although Walmart has been surpassed by Amazon in sales, its unique advantages in the e-commerce space and robust growth potential continue to make it an attractive option for investors.
See More
