Amazon is set to report its Q4 earnings on Thursday after market close, with Wall Street eagerly anticipating updates on Amazon Web Services (AWS) growth and the company’s AI strategy. Despite lagging behind most Magnificent Seven peers over the past year, analysts remain optimistic about Amazon’s prospects, particularly regarding AI-driven revenue acceleration.
Wall Street expects Amazon to post earnings-per-share of $1.96 and revenue between $211.2 billion and $211.56 billion for the quarter. Analysts anticipate earnings before interest and taxes (EBIT) of $24.6 billion. However, several investment banks have raised their estimates above consensus, with Bank of America predicting $213 billion in revenue and $26 billion in EBIT.
The key focus for investors will be AWS growth acceleration, with analysts expecting 22% year-over-year growth compared to 20% in Q3 2025. This acceleration is attributed to increased AI capacity and demand for AI services. JPMorgan analysts highlighted Amazon’s AI initiatives, including Project Rainier, Trainium chip ramp-up, and new AI partnerships as critical drivers of AWS performance.
Deutsche Bank believes Amazon could be a top performer in 2026, despite not expecting the Q4 report to immediately boost the stock. The firm anticipates positive results from both e-commerce demand and AWS-driven revenue growth will gradually improve Amazon’s market position.
UBS raised its estimates for both AWS growth and Amazon’s capital expenditures, noting the company’s ambitious plans to double AI capacity by 2027. The firm expects investor conviction to rise as AWS shows its second consecutive quarter of acceleration, driving capital rotation into Amazon shares.
Mizuho Securities maintains Amazon as a top pick, viewing it as a winner in the online advertising boom. Analyst Lloyd Walmsley emphasized that the shift from AI training to inference workloads plays to Amazon’s strengths and should boost AWS revenues. The firm also expects continued improvements in e-commerce margins through automation and advertising growth.
Across the board, analysts are watching for AI capex guidance, AWS pricing power, and details on generative AI adoption among enterprise customers. The consensus view suggests Amazon’s investments in AI infrastructure and services will be critical to its competitive positioning in 2026 and beyond.
Key Quotes
We expect 22% y/y AWS growth (above Street at 21% and an accel from 20% in 3Q) as greater capacity drives incremental sales, and we think investors could also be around 22% y/y
Bank of America analyst Justin Post explained his bullish AWS growth expectations, highlighting how Amazon’s expanded AI capacity is expected to drive sales acceleration above Wall Street consensus estimates.
We remain bullish on AWS growth acceleration driven by core cloud growth & ramping AI contribution led by Project Rainier, Trn ramp, & new partnerships
JPMorgan analysts outlined the specific AI initiatives they believe will drive AWS performance, including Amazon’s Project Rainier AI infrastructure, Trainium chip adoption, and strategic AI partnerships.
As GenAI compute demand increasingly shifts to inference this plays to Amazon’s strength and should help further boost revenues at AWS
Mizuho analyst Lloyd Walmsley identified a key competitive advantage for Amazon: as AI workloads shift from training to inference, Amazon’s infrastructure is well-positioned to capture this growing market segment.
As 4Q25 results marks the second quarter of AWS acceleration, we expect investor conviction to continue to rise and drive outperformance as capital continues to rotate into AMZN shares
UBS analyst Stephen Ju explained why consecutive quarters of AWS acceleration matter for investor sentiment, suggesting sustained growth will attract capital back to Amazon stock after its period of underperformance.
Our Take
Amazon’s earnings report will be a critical test of whether massive AI infrastructure investments are paying off. While the company has lagged its Magnificent Seven peers, the anticipated AWS acceleration suggests Amazon may be hitting an inflection point where AI demand translates to meaningful revenue growth.
What’s particularly interesting is the consensus around AI inference workloads favoring Amazon. If true, this represents a strategic advantage as the AI industry matures beyond the training-heavy phase. Amazon’s custom Trainium chips and Project Rainier infrastructure could provide cost advantages that attract enterprise customers looking to deploy AI at scale economically.
However, the rising capex expectations are concerning. Doubling capacity by 2027 requires enormous capital, and if AI demand doesn’t materialize as expected, Amazon could face margin pressure. The key will be whether AWS pricing power holds—recent price increases suggest strong demand, but competition from Microsoft and Google remains fierce. This earnings call will reveal whether Amazon’s AI strategy is visionary or overly optimistic.
Why This Matters
This earnings report represents a pivotal moment for Amazon’s AI strategy and its ability to compete with Microsoft Azure and Google Cloud in the rapidly expanding AI infrastructure market. As enterprise AI adoption accelerates, AWS’s performance will signal whether Amazon can maintain its cloud leadership while capturing AI workload growth.
The anticipated AWS acceleration to 22% growth is significant because it suggests Amazon’s massive AI infrastructure investments are translating into revenue. With companies increasingly shifting from AI model training to inference workloads—where Amazon claims advantages—this could mark a turning point in the cloud AI wars.
Amazon’s plan to double AI capacity by 2027 indicates the company expects sustained enterprise demand for AI services. This aggressive expansion, combined with custom AI chips like Trainium, positions Amazon to offer cost-competitive AI infrastructure that could attract price-sensitive enterprises. For the broader tech industry, Amazon’s AI momentum—or lack thereof—will influence investor sentiment toward AI infrastructure investments and validate or challenge the massive capital expenditures across Big Tech.
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