Major Bank Ratings | Bank of America: Due to valuation pressure across the SaaS sector, Amazon's target price is lowered to $286, "Buy" rating reiterated

Glonghui, January 28｜Bank of America Securities released a research report, lowering Amazon's target price from $303 to $286, mainly reflecting the general pressure on valuations in the Software as a Service (SaaS) sector. However, the bank reiterated its "Buy" rating on Amazon, believing that the growth of its cloud computing business (AWS) is expected to accelerate, and together with improved sentiment in the artificial intelligence (AI) market, will drive an upward revaluation of the company. The bank expects Amazon's fourth-quarter results, to be announced on February 5, to exceed market expectations, forecasting revenue of $213 billion and EBIT of $26 billion, both higher than the market consensus of $211 billion and $24.6 billion, respectively. Among them, AWS revenue is expected to grow 22% year-on-year, further accelerating from the 20% growth in the third quarter and exceeding the market expectation of 21%. The bank pointed out that AWS's capacity continues to increase, and the CEO recently revealed in an interview that demand still exceeds supply, which helps support business growth and pricing power. The report noted that Amazon's stock price underperformed the market in 2025, mainly reflecting concerns about its AI strategy and cloud business growth. However, as AWS's capacity situation improves in 2026 and several large AI companies are expected to go public in the next two years, this will provide a more favorable reference for AWS's valuation and is expected to drive a rebound in Amazon's overall valuation.