Bank of America says now is the time to buy Amazon, pointing to underappreciated cloud and AI upside ahead of earnings.
Amazon’s share price does not yet reflect the company’s next phase of growth, according to Bank of America, which is encouraging investors to build positions before earnings later this month.
Key takeaways:
Bank of America views current pricing as overly cautious
AWS and artificial intelligence are seen as the main upside drivers
Retail efficiency is expected to lift profit growth
Amazon enters earnings after four straight beats
The bank argues that investor caution around Amazon Web Services has become the primary drag on valuation, even as fundamentals remain intact. Analyst Justin Post believes this hesitation could reverse if cloud growth regains momentum and Amazon sharpens its competitive position in artificial intelligence over the next year.
Why Bank of America Thinks the Market Is Too Cautious
While cloud uncertainty dominates the narrative, Bank of America sees Amazon quietly strengthening its core business. Efficiency gains across logistics and retail operations are expected to support margin expansion, positioning the company to outgrow other mega-cap technology peers on profits rather than just revenue.
Earnings expectations remain constructive. Wall Street forecasts fourth-quarter earnings of $1.97 per share, building on a streak of four consecutive upside surprises. Profit for the full fiscal year is projected to climb sharply, with further growth anticipated into 2026.
Despite these trends, Amazon’s stock has lagged the broader market, trailing major indices over the past year. Bank of America views that underperformance as an opportunity rather than a warning, arguing that the disconnect leaves room for multiple expansion as sentiment shifts.
Beyond earnings, Amazon is widening its long-term infrastructure footprint. Nigeria has granted the company a multi-year license to operate satellite broadband services starting in 2026, bringing Amazon’s low-Earth-orbit network into direct competition with Starlink, operated by SpaceX.
The move underscores Amazon’s broader strategy: pairing cloud, artificial intelligence, and connectivity to reach new markets. Bank of America sees these pieces coming together at a time when the stock, in its view, is still priced for hesitation rather than execution.
