By With Amazon’s earnings around the corner, Wall Street investors are expecting solid results from the tech giant.
The e-commerce titan is set to report after the bell on Thursday, and analysts are upbeat about the firm’s year-end performance. Strong holiday demand and ad revenue growth are among the positive drivers.
More eye-catching is Amazon’s cloud-computing platform, AWS, which investors expect will be a chief driver of growth both in the fourth quarter and throughout 2025.
Here’s what top analysts are eyeing ahead of Amazon’s earnings results.
BofA: Watch for outlooks on AWS, AI
Bank of America says Amazon will likely beat operating profit estimates at $19.7 billion after a solid fourth quarter driven by a strong holiday season. The firm is set to notch $187 billion in quarterly sales, in line with Wall Street projections.
BofA expects investors to be focused on AWS growth, AI scaling, ad revenue, and the outlook for 2025 expenditures. Cloud demand should remain robust, while AI could remain a meaningful contributor to growth in the next year.
“Drivers include Amazon’s growing partnership with Anthropic, new competitive AI offerings (including Nova models and lower infrastructure costs on Trainium), and ramping GPU supply (greater Nvidia chip supply as well as the launch of Nvidia’s Blackwell chips & cloud products),” the bank said.
BofA mainains a “Buy” rating on Amazon and a price objective of $255, about 8% above the current price.
Deutsche Bank: Don’t underestimate cloud demand
Deutsche Bank is gearing up for an earnings beat, driven by an improving US consumer backdrop and rising demand for AI. AWS margins and retail gross profit per unit should also outpace expectations, making $21 billion in operating income look achievable to the bank — around 7% above consensus.
“Our confidence in this outlook is informed by checks that have indicated broad-based acceleration in overall Gen AI demand coupled with increasingly positive industry posture towards AWS’s suite of AI services,” analysts wrote. “To that end, we believe it likely that AWS can add incremental AI dollars in the 4Q in at least the low hundreds if not mid-hundreds of millions Q/Q.”
Complementing these tailwinds is the firm’s increasingly optimized cost-to-serve, strong advertising growth, and better-than-expected holiday demand.
Deutsche Bank has a $275 price target on Amazon, almost 17% higher than current levels.
Wedbush Securities: “Overly conservative” investors gloss over 2025 margin upside
Retail efficiency gains and a strong US holiday season have put Amazon on track for a year of meaningful margin expansion, according to Wedbush Securities.
The investing firm expects Amazon to deliver $20.7 billion in fourth-quarter operating income, 9% above consensus estimates. This figure would mean the company has exceeded initial 2024 income expectations by over 40%, a performance Wedbush expects Amazon to repeat.
“While the bar is higher this year, we think Amazon is positioned to outperform expectations again in 2025, and our full-year operating income estimate is 5% above consensus,” said a team led by analyst Scott Devitt.
Wedbush isn’t concerned about perceived headwinds that have turned investors “overly conservative” on Amazon’s margin potential, such as rising costs behind the firm’s satellite and AI initiatives. Instead, retail strength, fulfillment optimization, and higher-margin AWS and advertising revenue will drive the e-commerce giant toward more gains.
Wedbush maintains an “Outperform” rating on Amazon. It increased its price target to $280, implying a nearly 19% gain from current levels.
Morgan Stanley: Robotics are an overlooked tailwind
Amazon is putting robotics at the center of its warehouse business, an advantage investors may be under-appreciating, according to research analyst Brian Nowak.
“Amazon now has industrial robots that can increase efficiencies across the storage, inventory management, pick/pack, sorting and outbound stages of the order fulfillment process,” he wrote. “Given fulfillment costs make up almost 20% of Retail revenue (with labor making up an estimated ~60% of fulfillment costs), automation can have a significant impact on long-term EBIT potential.”
This is a long-term positive that could unlock $10 billion in savings for the company by 2030, if 30% to 40% of Amazon’s US units are serviced by robotics-enabled warehouses.
Morgan Stanley holds an “Overweight” rating on Amazon and a $280 price target, indicating nearly 19% upside from current levels.
Mizuho: Ad trends point to positives for e-commerce.
Improving ad-spend growth in the fourth quarter has convinced Mizuho analysts that consumer spending is normalizing, a macro-positive for the e-commerce giant. Pricing improvements for both staples and discretionary products point to a healthier consumer environment.
“Overall, we believe risk/reward is favorable for AMZN into the print due to (1) AWS outperformance; (2) retail margin expansion; and (3) capital efficiency from mix shift to custom ASICs,” the investing firm said.
Mizuho has an “Outperform” rating on Amazon stock and holds a price target of $285, 20% higher than current levels.
