Bank of America has advised investors to purchase Amazon stock immediately, prior to the company's earnings release later this month. The bank has identified Amazon as a prime candidate among stocks best positioned for the upcoming earnings season, asserting that the technology giant has "more room to run."
Analyst Justin Post commented, "We believe Amazon’s valuation reflects uncertainty on AWS positioning, which has the potential to improve in 2026 if AWS revenue growth accelerates, and the company strengthens its relative AI capabilities."
Essentially, the current stock price is being influenced by apprehension surrounding Amazon's cloud computing division. However, Bank of America anticipates a rapid shift in this sentiment, suggesting that investors should begin increasing their holdings in the company now.
Bank Foresees Growth in Retail and Cloud Segments as Earnings Approach
The recent analyst note also indicated that Amazon is poised for valuation expansion as it continues to introduce new artificial intelligence tools. Regarding its retail operations, Post highlighted that the company "continues to execute on efficiencies," and projected that Amazon's profit growth will outperform that of other major technology companies.
This outlook comes as Amazon prepares to announce its fourth-quarter earnings for the fiscal year 2025. Analysts are forecasting earnings per share of $1.97, an increase from $1.86 in the previous year.
Amazon has a track record of exceeding Wall Street's profit expectations for four consecutive quarters. In the third quarter, the company reported an earnings per share of $1.95, significantly surpassing estimates by 23.4%. Full-year profit for 2025 is anticipated to reach $7.17 per share, representing a nearly 30% increase from the $5.53 reported last year. Projections for 2026 suggest earnings per share of $7.85, indicating a further 9.5% growth.
Year-to-date, Amazon's stock has appreciated by 3%, and over the past 52 weeks, it has climbed 11.4%. Despite this performance, it still lags behind the S&P 500's 17.7% gain and the Consumer Discretionary ETF's 11.6% increase, which contributes to Bank of America's view of further potential upside.
Nigeria Grants Amazon a Satellite License, Expanding Global Reach
In a significant development, Nigeria has awarded Amazon a seven-year operating permit for satellite broadband services. This license will enable the deployment of the company's low-Earth-orbit network, previously known as Project Kuiper, across the region starting in 2026.
Amazon's satellite division will now directly compete with Starlink, the broadband service provided by Elon Musk's SpaceX.
The Nigerian Communications Commission (NCC) has also issued similar permits to Israel's NSLComm and Germany's Satelio IoT Services, authorizing all three entities to launch non-geostationary satellite systems throughout the country.
This strategic move signifies Amazon's entry into Africa's growing digital market and re-emphasizes its infrastructure strategy, extending beyond cloud computing and artificial intelligence to encompass connectivity itself. The satellite license is expected to broaden its operational scope and potentially integrate with AWS by enabling the connection of remote enterprise clients to its cloud infrastructure.
Amazon, currently valued at $2.6 trillion, continues to maintain its leadership position in global e-commerce. The Seattle-based company operates a comprehensive platform that facilitates the sale of a vast array of products, both directly and through third-party vendors.
Bank of America's Broader Investment Recommendations
Bank of America's optimistic assessment of Amazon was part of a broader list of stock recommendations. This list also included Brookdale Senior Living, Carvana, Corning, and Vertiv, with each company being highlighted for distinct reasons.
Brookdale Senior Living received an upgrade from analyst Joanna Gajuk, who raised her price target from $6.75 to $13. Her recommendation was based on the company's operating leverage and limited exposure to government payers.
Carvana's price target was increased from $455 to $515 by analyst Michael McGovern. He cited the company's expansion into physical dealerships and its "best-in-class eCommerce growth" as key factors.