Amazon (AMZN) stock has gained about 5.3% over the past five days, at the time of writing, Tuesday afternoon, Jan. 27, according to Yahoo Finance. The company has set a Q4 earnings release for February 5, and investors are hoping it will beat consensus estimates, as it did in Q3.
I covered Q3 results in my article “Bank of America resets Amazon stock price after earnings smasher.”
Other factors are helping the stock, too.
“Now, as early as Tuesday next week, Amazon will reportedly announce the second round of its broader layoff plan; the number is expected to be the same as in October: 14,000. This can impact employees across its Prime Video, human resources, and Amazon Web Services units,” writes Aparajita Chatterjee for TheStreet.
On top of layoffs, AWS scored a $581 million deal from the U.S. Air Force’s Cloud One Program.
Bank of America analyst Justin Post and his team updated their Amazon stock outlook ahead of earnings.
Analysts estimate Amazon’s Q4 revenue and EBIT at $213 billion and $26.0 billion, respectively, which are above Wall Street‘s estimates of $211 billion and $24.6 billion.
They expect 22% year-over-year AWS revenue growth as greater capacity drives incremental sales. Analysts noted that Amazon CEO Andy Jassy‘s recent interview with The Information suggests demand still outstrips capacity, which is a positive for pricing.
Related: Bank of America resets Meta stock forecast before earnings
Post said Q1 margins should benefit from Q4 layoffs. For Q1, the team estimates stable retail growth, while incremental capacity should support AWS acceleration. They expect Q1 Amazon revenue guidance to be in the range of $173 billion to $178 billion, and operating income in the range of $18.5 billion to $22.5 billion.
They noted that Amazon usually beats Q1 guidance, and a Q4 beat could drive upside to the Q1 ranges.
In a research note shared with me, Post reiterated a buy rating and lowered the target price from $303 to $286, due to software as a service sector multiple compression.
The target price is based on his sum-of-the-parts analysis that values AWS at 9x 2027 sales, first-party retail at 1.1x, third-party retail at 2.5x, and advertising at 5.0x. Post’s price target implies a 3.5 times blended price-to-sales ratio, 12 times 2027 EBITDA, and 31 times 2027 EPS.
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Increasing competition from offline and local retailers
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AWS client cost optimization impact on revenues and margins
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Regulatory pressure on the third-party marketplace
They also noted that the stock has been subject to heavy volatility in the past, based on margin trends, and this volatility could increase due to economic uncertainty.
AWS launched AWS European Sovereign Cloud, a new, independent cloud for Europe entirely located within the EU, and physically and logically separate from other AWS Regions.
According to the company, the AWS European Sovereign Cloud provides the only fully featured, independently operated sovereign cloud backed by strong technical controls, sovereign assurances, and legal protections designed to meet the needs of European governments and enterprises for sensitive data.
AWS plans to expand its AWS European Sovereign Cloud footprint from Germany across the EU, starting with new sovereign AWS Local Zones in Belgium, the Netherlands, and Portugal.
“Europe needs access to the most robust cloud and AI technology. The expansion of AWS innovation across Europe will help supercharge customers’ growth and AI ambitions,” said Stéphane Israël, managing director of the AWS European Sovereign Cloud and digital sovereignty.
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LSEG, a global financial markets infrastructure and data provider, announced it will collaborate with AWS. The company sources and distributes market data from over 575 exchanges and trading venues to customers worldwide, delivering hundreds of billions of data updates every day.
LSEG will be leveraging AWS’s services in the collection, routing, and distribution of its Real-Time financial data. This partnership will leverage LSEG’s private cloud and enable financial institutions to access its market data with greater flexibility, speed, and resilience.
Ron Lefferts, Co-Head of Data & Analytics, LSEG, said: “LSEG’s real-time data and feeds is a crucial component of our business and this collaboration is part of our cloud transformation strategy. Advances in AI and other technologies mean that demand for data is accelerating rapidly. This is a fundamental transformation of our critical data offering that powers the financial markets.”
Infosys (INFY), a digital services and consulting firm, entered into a partnership with AWS. The two companies are combining Infosys Topaz, an AI-first set of services, solutions, and platforms powered by gen AI, with Amazon Q Developer, AWS’s gen AI assistant.
Infosys Topaz is designed to enhance productivity in software development, HR, recruitment, sales, and vendor management.
The company provides an example of how, in the software development lifecycle, integrating Infosys Topaz with Amazon Q Developer enables automated documentation and provides tailored support for tasks such as code generation, debugging, testing, and legacy code modernization, significantly enhancing workflow efficiency and accuracy.
Overall, Amazon shareholders will want to see the company overdeliver on:
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Q4 revenue, expected by BofA to be $213 billion. Wall Street is modeling $211 billion.
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Q4 EBIT: BofA estimate is $26. Wall Street expects $24.6.
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Q1 revenue guidance, BofA expects in the range $173 billion to $178 billion. Wall Street is targeting $175.4 billion.
The author holds no position in AMZN at the time of writing.
Related: Bank of America resets Intel stock forecast
This story was originally published by TheStreet on Jan 28, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.
