Is Amazon The Next Big AI Winner? One Analyst Thinks Wall Street Is Wrong

Benzinga
2025.10.22 16:20
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Amazon.com Inc (NASDAQ:AMZN) is expected to report strong Q3 results, driven by online retail and AI capabilities, according to Bank of America analyst Justin Post. He maintains a Buy rating with a price forecast of $272, anticipating revenue of $179.2 billion and operating profit of $20.4 billion. Post cites healthy retail sales and online spending acceleration as key factors. Despite concerns over AWS's AI competitiveness, he sees positive catalysts ahead, including new data center capacity and the success of AI partner Anthropic. Amazon shares are currently down 1.43% at $218.85.

Amazon.com Inc (NASDAQ:AMZN) expects to report strong third-quarter results driven by online retail sales and its artificial intelligence capabilities.

The Seattle-based company’s retail business is showing renewed strength. Plus, its cloud unit is set for a rebound. According to Bank of America Securities analyst Justin Post, Amazon is poised to address recent investor concerns about AI.

Also Read: Amazon Defies Retail Slowdown, Sticking With 250,000 Holiday Hires

Post, who maintains a Buy rating on Amazon, expects the company to report strong third-quarter results. The analyst, who has a price forecast of $272, forecasts revenue of $179.2 billion. That’s above the Street estimate of $177.7 billion.

Operating profit, he expects, will be $20.4 billion. The Street estimate is currently $19.7 billion.

For Amazon Web Services (AWS), he expects $32.3 billion (17.7% growth) close to Street at $32.4 billion (18% Y/Y).

Amazon Q4 Outlook Is Strong, Analyst Says

Post attributes this upside to healthy retail sales, strength in online advertising, and cost efficiencies from earlier layoffs at AWS.

Post supports his optimistic retail forecast with Bank of America’s internal credit and debit card data, which indicates an acceleration in online spending during the third quarter.

The data suggests Amazon’s North American retail segment is tracking ahead of market expectations, as per the analyst.

He anticipates Amazon will provide a strong fourth-quarter outlook, forecasting continued e-commerce momentum and a modest acceleration in AWS growth.

Post noted that investor concerns about AWS’s competitive positioning in artificial intelligence have caused the stock to underperform the broader market in 2025.

However, the analyst sees a positive shift on the horizon.

He pointed to several key catalysts that should change the narrative, including the ramping up of new data center capacity in 2026, accelerating backlog growth, and the success of key AI partner Anthropic.

Post believes Amazon will be in a much better position to highlight the benefits of its custom Trainium AI chips in the coming year.

The analyst noted that Amazon’s stock trades at an attractive valuation, below its historical average and at a discount to its peers, such as Walmart Inc. (NYSE:WMT).

Price Action: Amazon shares are down 1.43% at $218.85 at the time of publication on Wednesday.

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