Bank of America Urges Investors to Buy Amazon Stock Ahead of Q4 2025 Earnings Report
- Why Is Bank of America Bullish on Amazon?
- AWS and Retail: Dual Growth Engines
- Nigeria Satellite License: A Game-Changer?
- How Does Amazon Stack Up Against the Market?
- Earnings Preview: What to Watch
- Risks and Final Thoughts
- FAQs
Bank of America has issued a bullish recommendation for Amazon (AMZN) ahead of its Q4 2025 earnings release, citing strong growth potential in AWS, retail efficiency improvements, and a new satellite broadband license in Nigeria. Analyst Justin Post highlights Amazon’s undervalued position due to AWS uncertainty but predicts a rebound as AI tools and cloud acceleration drive performance. With EPS expected to rise 30% YoY and a new African market expansion, Amazon’s stock—up just 3% YTD—could soon outpace the S&P 500. Here’s why the BTCC team agrees.
Why Is Bank of America Bullish on Amazon?
Bank of America analyst Justin Post argues that Amazon’s current valuation doesn’t reflect its long-term potential, particularly in AWS (Amazon Web Services). "The market is overly focused on short-term AWS headwinds," Post notes, "but by 2026, we expect revenue growth to reaccelerate as AI adoption boosts cloud demand." Amazon’s stock trades at a discount compared to peers like Microsoft and Alphabet, despite its dominant e-commerce position and AWS’s profitability. The BTCC team points out that Amazon has beaten Wall Street EPS estimates for four consecutive quarters, including a 23.4% surprise in Q3 2025 ($1.95 EPS vs. $1.58 expected).
AWS and Retail: Dual Growth Engines
AWS remains Amazon’s crown jewel, contributing nearly 70% of operating income. Post’s report emphasizes that AWS’s AI integrations (like Bedrock and SageMaker) will drive margin expansion as enterprises shift workloads to the cloud. Meanwhile, Amazon’s retail division is squeezing out efficiencies—fulfillment costs dropped 12% YoY in Q3—while growing revenue. "They’re doing the impossible: cutting costs *and* gaining market share," says a BTCC analyst. For 2025, consensus EPS forecasts sit at $7.17 (up from $5.53 in 2024), with 2026 projections at $7.85 (+9.5%).
Nigeria Satellite License: A Game-Changer?
In a strategic move, Amazon secured a 7-year satellite broadband license in Nigeria for Project Kuiper, its low-Earth orbit network set to launch in 2026. This pits Amazon against Elon Musk’s Starlink in Africa’s fast-growing digital economy. The Nigerian Communications Commission (NCC) also approved licenses for Israel’s NSLComm and Germany’s Satelio, but Amazon’s AWS backbone gives it a unique edge. "Imagine linking remote businesses to AWS via satellite—that’s a trillion-dollar opportunity," notes the BTCC team. Source:.
How Does Amazon Stack Up Against the Market?
Despite a 11.4% gain over the past 52 weeks, Amazon trails the S&P 500 (+17.7%) and Consumer Discretionary ETF (+11.6%) in 2025. Bank of America attributes this to "temporary AWS jitters" and maintains a $220 price target (25% upside). TradingView data shows AMZN’s RSI at 58—neither overbought nor oversold—suggesting room to run. "This is a classic ‘buy the dip’ moment," argues Post. Other upgrades in BofA’s report include Carvana (target raised to $515) and Brookdale Senior Living (target doubled to $13).
Earnings Preview: What to Watch
Amazon will report Q4 2025 earnings on January 25, with analysts expecting $1.97 EPS vs. $1.86 YoY. Key metrics:
- AWS revenue growth: Consensus at 14% YoY (accelerating from 12% in Q3).
- Retail margins: Projected to hit 5.2%, up from 4.3% in 2024.
- Kuiper updates: Look for capex guidance on African rollout.
"Another EPS beat could trigger a short squeeze," says the BTCC team. Data source:.
Risks and Final Thoughts
Regulatory scrutiny (especially in AWS’s EU markets) and Starlink’s African head start are wild cards. But with AI, retail, and satellites converging, Amazon’s $2.6T valuation might still be cheap. "I’d buy shares before earnings—this could be 2023’s Meta-like turnaround," shares a BTCC analyst. *This article does not constitute investment advice.*
FAQs
What’s Bank of America’s Amazon price target?
$220, implying 25% upside from current levels.
When does Amazon report earnings?
January 25, 2026 (Q4 2025 results).
How does Project Kuiper compete with Starlink?
By integrating AWS cloud services with satellite internet, targeting enterprise users.
