Bank of America: Looking for strength in cloud and AI demand.
Amazon
Amazon should deliver a solid fourth-quarter report, as holiday-boosted retail growth will deliver an above-consensus operating profit of $19.7 billion. The firm’s AWS cloud platform will likely meet expectations for 19% to 20% growth, BofA said, thanks to rising AI contributions.
Drivers to cloud demand 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).”
But there are risks moving forward. The bank lowered its first-quarter revenue amid tariff and currency headwinds and cited that AWS margins may have peaked in 2024 amid favorable demand.
BofA maintains a “Buy” rating on Amazon and a price objective of $255, or 8% above the firm’s current share price.