Amazon defended at BofA as catalysts will support AWS sentiment

Investing.com -- Bank of America reiterated its positive stance on Amazon, saying rising cloud capacity, accelerating revenue trends, and improving AI deal flow should help lift investor sentiment around Amazon Web Services.

The call comes from Justin Post, the BofA analyst who maintained a Buy rating and a $275 price target on the stock in a note on Wednesday.

Post highlighted Amazon’s disclosure that “AWS added 3.9 gigawatts in 2025 alone, with plans to double capacity again by 2027.”

According to BofA, AWS has already doubled its power capacity since 2022, a buildout that helped revenue growth accelerate from “17% y/y in 2Q’25 to 24% in 4Q’25.”

The firm said estimates show AWS power capacity rising to more than 31 gigawatts by the end of 2027, up from about 15 gigawatts in the third quarter of 2025.

Based on Amazon’s historical capex data, BofA estimates AWS could generate “$164bn in 2026 revenues and $209bn in 2027,” representing potential 2% and 5% upside to current Street forecasts.

Post cautioned that rising construction costs and an unprecedented industry capex cycle pose risks.

“We estimate hyperscalers will spend $1.2tn on capex over the next two years,” he wrote, a surge that could inflate costs and pressure pricing.

Still, BofA argued that catalysts remain favourable. Post said sentiment should improve as AWS revenue growth continues, “Trainium adoption increases,” and new AI agreements validate Amazon’s lower-cost approach.

He added that any progress in Amazon’s proprietary large language model development would also be constructive for the stock.

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