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The real story is AWS, not just retail
Bank of America just gave Amazon another pre-earnings tune-up, keeping its Buy rating and raising its price target to $310. The bank thinks the market is underestimating how much AWS could benefit from the AI boom, with enterprise demand, Bedrock usage, and Anthropic-related workloads all helping the cloud business look a little less like a mature giant and a little more like a growth machine.
Why investors should care
The firm now expects Amazon to post $198.8 billion in second-quarter revenue and $24.1 billion in operating income, both above Wall Street consensus. It also bumped its AWS growth forecast to 33% year over year, up from 31%, which is Wall Street-speak for: the cloud train may still have some juice left.
The capex elephant in the room
Of course, none of this comes free. Bank of America thinks Amazon could raise 2026 capital spending to around $210 billion because AI infrastructure is expensive and memory chips apparently did not get the memo about staying cheap. That could spook traders in the short run, but the bullish case is that stronger cloud demand and better AI monetization eventually make the spending binge look smart instead of chaotic.
What to watch on July 30
Amazon reports second-quarter results on July 30, and the market will be staring at a few things:
- AWS growth and margins
- AI backlog and Bedrock adoption
- Guidance for third quarter sales
- Any commentary on capex and AI infrastructure spending
The broader vibe here: Amazon is trying to convince investors it’s not just a retail beast with a cloud side hustle. It wants to be the AI infrastructure landlord. Big picture: if AWS keeps accelerating, the stock has a lot more room to run than the headline valuation would suggest.