Amazon (AMZN) Stock: What to Expect from Earnings Today?

TLDR

• Amazon reports Q4 earnings Thursday with Wall Street expecting $211.4 billion revenue and $1.97 EPS
• UBS raised price target to $311 from $310, calling Amazon a “coiled spring” ahead of earnings
• Amazon Web Services beat Q3 expectations with $33 billion revenue, up from $32.5 billion estimate
• Company plans to double AWS capacity by 2027, raising CapEx estimates from $300B to $344B through 2027
• Amazon recently announced 16,000 corporate job cuts to reduce layers and bureaucracy

Amazon reports fourth-quarter earnings after the market close on Thursday. The focus will be squarely on Amazon Web Services and its growth trajectory.

Amazon.com, Inc., AMZN

Wall Street expects revenue of $211.4 billion and adjusted earnings per share of $1.97 for the December quarter. For the current quarter, analysts forecast revenue of $175.6 billion and EPS of $1.73.

UBS analyst Stephen Ju raised his price target to $311 from $310 on Tuesday. He maintained his Buy rating on the stock.

Ju called Amazon a “coiled spring” ahead of earnings. He cited ongoing prospects for AWS growth acceleration as the company brings on incremental capacity.

AWS Capacity Expansion

Amazon Web Services exceeded expectations in the third quarter. The cloud computing unit reported $33 billion in revenue versus the $32.5 billion analyst estimate.

During the October earnings call, Amazon revealed plans to double AWS capacity by 2027. This ambitious expansion has prompted UBS to revise its capital expenditure estimates upward.

The firm now expects aggregated CapEx from Q4 2025 through Q4 2027 to reach $344 billion. That’s up from the previous estimate of $300 billion.

AWS-specific CapEx projections increased from $225 billion to $260 billion over the same period. UBS believes the market hasn’t yet priced in a scenario where AWS revenue doubles by 2028.

Free Cash Flow Potential

The increased capital intensity could generate an additional $20 billion in free cash flow by 2028. That’s according to UBS estimates.

Ju noted this marks the second quarter of AWS acceleration. He expects investor confidence to continue rising as capital rotates into Amazon shares.

The firm believes benefits from investments across e-commerce, content, and LEO will also boost free cash flow revisions. These additional revenue streams from faster GMV, advertising, and data access should add to upside potential.

Amazon announced 16,000 corporate job cuts last month. The company said the cuts aim to remove layers and reduce bureaucracy.

The earnings report Thursday will provide clarity on whether AWS growth is sustaining its momentum. It will also reveal how the rest of Amazon’s business performed during the critical holiday quarter.

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