As traders eagerly await Amazon’s fourth-quarter earnings report, set to be released after the market close on Thursday, analysts are closely monitoring key metrics associated with both its cloud computing and retail sectors. Following a series of significant cost-reduction measures initiated in late 2022, Amazon stands at a pivotal juncture—striving to solidify its status as a formidable player in artificial intelligence while simultaneously navigating a competitive e-commerce landscape. This dynamic backdrop has heightened the stakes for the upcoming earnings announcement.
The company’s cloud division, Amazon Web Services (AWS), is particularly scrutinized in light of recently disappointing cloud revenue reported by industry competitor Alphabet. Both analysts and investors will be seeking insights into how these market dynamics may influence Amazon’s forecasts and operational performance moving forward. Additionally, the looming threat of tariffs on imports from Mexico, Canada, and China adds an intriguing layer of complexity to the company’s outlook, especially with ongoing policy discussions in Washington.
Analysts surveyed by LSEG project that Amazon will report earnings of $1.49 per share alongside anticipated revenue of approximately $187.30 billion. This follows a successful third quarter, where the company exceeded earnings and revenue expectations, buoyed mainly by robust growth in its cloud services and advertising sectors. The share price has seen notable resilience, rising more than 8% in 2025, outperforming the S&P 500 index, which reflects a modest increase of 3.2%. The prevailing sentiment among analysts is notably bullish, especially considering the historical boost to Amazon’s financial performance during the holiday shopping season.
The consensus rating predominantly leans towards a ‘buy’ or ‘strong buy’ classification, demonstrating a robust confidence in Amazon’s ability to leverage its operational strengths. The average price target of $250.66 among analysts suggests there’s approximately 5% upside potential from current trading levels, indicating analysts believe there could still be room for growth.
Analysts’ Predictions and Concerns
Investment firms such as Bank of America and Citi have reiterated their confidence in Amazon ahead of its earnings release. They foresee a potential upside stemming from a strong holiday sales performance alongside continued growth in AWS. Amazon’s stock trades at historically high valuations, yet analysts contend that the company’s pronounced profit growth and strategic positioning in the AI landscape via AWS justifies its high price-to-earnings ratio.
Bank of America’s Justin Post estimates AWS revenue will have grown between 19% and 20%, attributable in large part to the increasing integration of AI solutions. He maintains a price target of $255, creating an expectation for nearly an 8% increase from previous closing levels. However, Post has also acknowledged that foreign exchange fluctuations may pose a challenge in the upcoming quarter, leading him to adjust revenue estimates downward.
Citi analyst Ronald Josey remains optimistic regarding Amazon’s performance driven by solid holiday sales and a favorable online advertising ecosystem. He suggests that the company may outperform consensus expectations, emphasizing the potential for robust results in the face of increasing demand for cloud services. Josey opines that recent tariff discussions, particularly those related to Chinese imports, may not necessarily hinder Amazon. Instead, the ending of the de minimis trade exemption could harm competitors like Temu, potentially positioning Amazon favorably within the e-commerce sector.
Evercore ISI analyst Mark Mahaney predicts a “beat and bracket quarter” from Amazon, forecasting year-over-year revenue growth of 8% in North American retail and a substantial 19% surge in AWS revenue. His optimism extends beyond immediate quarterly results, spotlighting Amazon Pharmacy as a high-growth segment. With the company’s pronounced investments in enhancing its prescription delivery services, which tap into a substantial $175 billion market opportunity, Mahaney highlights a significant avenue for future expansion.
The fourth-quarter earnings report will serve as a crucial indicator not only of Amazon’s immediate financial health but also of its capacity to adapt and thrive amidst economic uncertainties and changing competitive landscapes. As the e-commerce titan continues to invest in diverse initiatives, including AI and pharmaceutical services, its performance will be closely watched by investors and analysts alike, shaping perceptions of its long-term trajectory. The stakes are high, and the upcoming financial disclosures promise to reveal the next chapter in Amazon’s ongoing evolution.
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