Bank of America Bullish on Amazon Ahead of Earnings, Sees AI-Driven Cloud Revival
Bank of America is urging investors to buy Amazon shares before earnings, citing undervaluation due to AWS uncertainty. Analyst Justin Post notes the cloud unit's potential rebound by 2026 could trigger a re-rating, especially with accelerating AI capabilities. Amazon’s stock has lagged the S&P 500 (up 3% YTD vs. 17.7%), but BofA expects retail efficiency and cloud margins to drive outperformance.
Q4 earnings loom with consensus at $1.97 EPS, building on a streak of four consecutive beats. Q3’s $1.95 EPS surpassed estimates by 23.4%. Fiscal 2025 profit is projected at $7.17/share, a 30% leap from 2024’s $5.53, while 2026 could reach $7.85. 'The valuation disconnect won’t last,' Post asserts, pointing to AI tool rollouts and cost discipline.