If you're an Amazon bull, Bank of America Securities analyst Justin Post just handed you some fresh ammunition. On Monday, he maintained his Buy rating on Amazon.com Inc. (AMZN) and, more importantly, cranked up his price target from $275 to $298. The thesis is pretty straightforward: he thinks Amazon's two main engines—cloud computing and retail—are accelerating faster than the Street expects.
Post isn't just talking a big game; he's putting specific numbers behind it. He raised his first-quarter estimates for revenue to $178.4 billion and operating income to $21.4 billion. That's above the consensus estimates of $177.1 billion and $20.7 billion, respectively. For the full year 2026, he's looking for total revenue of $813 billion and GAAP operating profits of $100.6 billion.
The real kicker is in Amazon Web Services (AWS). Post projects AWS growth will accelerate to 28% year-over-year. A huge chunk of that—an estimated $1.3 billion this quarter—is expected to come from revenues related to Anthropic, the AI company Amazon has invested heavily in. This leads him to forecast a $2 billion quarter-over-quarter increase in AWS revenue. Why is that notable? Because, according to Post, other analysts are only anticipating about $1 billion in sequential growth. He's essentially saying the cloud business is heating up twice as fast as people think.
On the retail side, things aren't cooling down either. Post points to Bank of America's own credit and debit card data, which shows online spending accelerated by 3 percentage points quarter over quarter. Because of this, he predicts North American Retail revenue could beat Street estimates by 1% to 2%. He credits faster delivery speeds, strong traction in groceries, and better inventory placement for keeping the retail flywheel spinning.
Now, it's not all smooth sailing. Post openly notes the risks. All that growth from AI, like the Anthropic revenue, tends to come with lower profit margins. Pair that with higher energy costs, and you've got some pressure on Amazon's bottom line. But Post believes the company has levers to pull. He points to the January layoffs and what he calls "strong core pricing" as necessary offsets that should help protect profits.
This leads to the big spending question: capital expenditures. Post expects Amazon's 2026 capex outlook to be stable-to-higher, potentially exceeding $200 billion. That's driven by higher infrastructure costs and, notably, a recently expanded capacity deal with OpenAI. It's a massive number, but Post remains constructive. He notes that CEO Andy Jassy expects the company to start monetizing a significant portion of these 2026 AI investments within 6 to 24 months. In other words, today's spending is supposed to turn into tomorrow's revenue.
So, there you have it. The analyst case is that Amazon's core businesses are firing on all cylinders right now, enough to overcome the near-term margin drag from its expensive AI bets. The market's initial reaction on Monday was a bit tepid, with Amazon shares down 1.62% at $246.50 at the time of publication, according to market data. But for bulls, Post's report lays out a clear path for why that might not last.
