Bank of America has maintained its constructive stance on Amazon, arguing that recent capacity additions at Amazon Web Services and stronger revenue momentum should support improved market sentiment toward the cloud business.
In a note published on Wednesday, BofA analyst Justin Post kept a Buy rating on the stock and held a $275 price target. Post highlighted Amazon's disclosure that AWS added 3.9 gigawatts of power capacity in 2025 alone, and that the company plans to double capacity again by 2027.
BofA's analysis points out that AWS has doubled its power capacity since 2022, a buildout the firm links with an acceleration in revenue growth from 17% year-over-year in 2Q'25 to 24% in 4Q'25. The bank's estimates indicate AWS power capacity could exceed 31 gigawatts by the end of 2027, compared with roughly 15 gigawatts in the third quarter of 2025.
Using Amazon's historical capital expenditure patterns as a guide, BofA projects AWS revenues of $164 billion in 2026 and $209 billion in 2027. Those figures would imply potential upside to current Street forecasts of about 2% in 2026 and 5% in 2027, according to the bank's calculations.
Post also cautioned that rising construction costs and an unprecedented industry capex cycle introduce risks. He wrote that hyperscalers are estimated to spend $1.2 trillion on capital expenditures over the next two years - a surge that could raise costs and exert downward pressure on pricing in the sector.
Despite these headwinds, BofA described the forward-looking catalysts as favorable. The bank expects sentiment to improve if AWS revenue growth remains on track, adoption of Trainium increases, and new AI agreements reinforce Amazon's lower-cost approach to supporting AI workloads. Post added that progress on Amazon's proprietary large language model would be another constructive development for the stock.
Contextual note - The analysis and estimates above are those reported by Bank of America in the referenced note and reflect the bank's interpretation of Amazon's disclosures and historical capex behavior.