Amazon stock jumps as BofA lifts target on AI, AWS growth after earnings

Amazon (AMZN) gave Wall Street a lot to like, and BofA analysts have responded in kind.

The bank kept its buy rating on Amazon stock, while raising its price target to $310 from $298, implying roughy 18% upside from its recent $263 level.

Three primary drivers anchoring the call include a robust AI-energized AWS, stronger retail, and Amazon's long-term AI opportunity.

The call comes after yet another earnings stunner from Amazon, which topped estimates across both lines by a comfortable margin.

CEO Andy Jassy was upbeat about Amazon's quarterly performance.

"We're in the middle of some of the biggest inflections of our lifetime, and Amazon has the culture, the know-how, and the resources to make so many customers' lives better and easier," he said during the call.

That doesn't mean Amazon has effectively solved all its problems, however.

It's still a work in progress toward a much larger AI-powered business, but BofA analysts say capacity is improving, and strong AI and retail demand could be enough to re-rate the stock.

Amazon Q1 results snapshot

• Amazon posted Q1 EPS of $2.78, blowing past estimates by $1.13, while sales shot up 16.6% year over year to $181.52 billion, beating market estimates by $4.35 billion.
• North America revenue surged 12% to $104.1 billion, while international revenue climbed 19% to $39.8 billion, underscoring tremendous strength across Amazon's retail operations.
• AWS remained a critical growth driver, with sales rising 28% year over year to $37.6 billion, coming in ahead of the $36.7 billion estimate.
• Operating income reached $23.9 billion, blowing past the $20.8 billion consensus and higher than Amazon's guidance range of $18 billion to $22.5 billion.
• Amazon guided for Q2 revenue of $194 billion to $199 billion, ahead of the consensus, while operating income guidance of $20 billion to $24 billion came in mixed compared to market expectations.
  
  Source: Seeking Alpha

Why BofA sees more room for Amazon stock

BofA's bull case stems from its assessment that multiple parts of its business are moving in the right direction at the same time.

That's especially true for AWS, which remains at the forefront of Amazon's AI race. Analysts see that quarter as proof that its AI investments are starting to translate into real business momentum, not just heightened spending.

• AWS is reaccelerating: Growth improved to 28%, supported by healthier AI demand and Bedrock traction.
• The AI backlog is building: BofA pointed to larger AI commitments, including Anthropic-related sales that will start to show up more meaningfully in future periods.
• Margins are holding up: AWS margins improved despite a heavier AI mix, suggesting the company might be getting better returns from its questionable infrastructure buildout.

Investors have been spooked by AI-related capital spending, as seen with Meta Platforms, whose stock fell sharply after earnings.

Unlike with Meta, BofA feels that even though Amazon's spending at a tremendous pace, its scale, Trainium chips and cloud relationships has the potential to turn that spending into durable expansion.

Amazon stock returns vs. the S&P 500

• Amazon stock returned 5.17% over one week, compared with 1.71% for the S&P 500.
• Over one month, they returned 33.50%, compared with 13.97% for the S&P 500.
• The six-month return was 20.37%, compared with 5.98% for the S&P 500.
• Year to date, the return was 16.22%, compared with 5.62% for the S&P 500.
• Over one year, Amazon gained 45.46%, compared with 29.83% for the S&P 500.
• Over three years, the stock returned 154.40%, compared with 73.41% for the S&P 500.
• Over five years, Amazon returned 54.73%, compared with 72.92% for the S&P 500.
  
  Source: Seeking Alpha

Robinson/Getty Images for The New York Times

Amazon's recent earnings history

Amazon's past four quarters show a consistent trend of top-line beats, with it comfortably surging past estimates. On the earnings front, things have also been encouraging, with a healthy pattern of beats, aside from a lone hiccup in the most recent quarter.

• FQ1 2026: EPS of $2.78 beat by $1.14; revenue of $181.52 billion beat by $4.35 billion, with year-over-year growth of 16.61%.
• FQ4 2025: EPS of $1.95 was in line with estimates at $0.00; revenue of $213.39 billion beat by $2.15 billion, with year-over-year growth of 13.63%.
• FQ3 2025: EPS of $1.95 beat by $0.39; revenue of $180.17 billion beat by $2.41 billion, with year-over-year growth of 13.40%.
• FQ2 2025: EPS of $1.68 beat by $0.36; revenue of $167.70 billion beat by $5.61 billion, with year-over-year growth of 13.33%.
  
  Source: Seeking Alpha

Risks to BoA's Amazon thesis

BofA analysts are leaning bullish on Amazon, but the case isn't without its fair share of risks.

Perhaps the biggest concern is that even though AWS is improving, it's still playing catch-up.

Growth rates accelerated to 28%, but BofA notes that Azure and Google Cloud are growing much faster, while Amazon remains constrained by capacity. AWS is a core pillar of the company's long-term expansion, and a big part of that thesis is AI demand translating into profitable, long-term cloud growth.

At the same time, there are margin-related questions.

Amazon's Q2 bottom-line guidance left much to be desired, with stock compensation, Leo satellite expenses, and fuel inflation weighing on its outlook. BofA also expects free cash flow to remain negative in 2026 and 2027 as capex remains heavy.

Retail isn't without its risks, either.

A shift toward first-party essentials and grocery products lays the foundation for stickier customers, but also pressures margins.

Add to that a ton of competition from local retailers, emerging AI cloud giants, and an iffy economic backdrop that leaves virtually no room for comfort for Amazon stock.

Wall Street price targets for Amazon stock after earnings

• UBS: $333
• JPMorgan: $330
• Canaccord: $330
• Goldman Sachs: $325
• Stifel: $319
• Telsey Advisory Group: $315
  
  Source: TipRanks, Investing.com

Related: Bank of America resets Meta stock price target following earnings

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This story was originally published May 2, 2026 at 11:03 AM.