Bank of America is getting bullish on Amazon ahead of the e-commerce giant’s earnings release, saying the company is getting ready to unlock its full artificial intelligence potential in the back half of the year. Analyst Justin Post reiterated his buy rating on Amazon and lifted his price target by $17 to $265. That suggests shares could gain 16.5% from their previous close. Amazon, which is set to report financial results on July 31, has seen shares rise 3.7% year to date. Post hiked his estimates for strong second-quarter retail data and Anthropic AI growth, and said his estimates for the quarter remain above the Street given strong e-commerce data, longer Prime DAy sales and currency tailwinds. Heading into the second half of the year, the analyst expects strong AI demand and Amazon Web Services capacity growth to be a key stock driver. To be sure, he anticipates AWS growth in the second quarter to reflect a slight deceleration from the first. “Amazon’s YTD commentary on AWS capacity constraints, plus recent competitor Cloud revenue acceleration has likely elevated Street focus on AWS,” Post wrote in a Wednesday note to clients. “We think 2Q Retail is setting up for a solid quarter, plus a strong 1Q for AWS backlog and accelerating quarterly AWS capex spending should drive accelerating 2H AWS growth.” “We think the most important commentary on the call will be 2H outlook for AWS growth (if provided), investors could become impatient on returns for ramping quarterly AWS capex spend given competitor acceleration,” Post added. Looking ahead, the analyst said this year’s longer Prime Day event and consumer resilience could drive a strong third-quarter outlook. Tariff uncertainty remains a key risk for the stock, he said. Amazon previously called out “tariffs and trade policies” and “recessionary fears” among several factors that could make its guidance subject to change. The tech giant topped earnings and revenue expectations for the first quarter, but had given light guidance for the second.
