Amazon Faces a Pivotal Earnings Test as AWS Growth Estimates Get a Last-Minute Upgrade

Amazon shares surge to a 52-week high as investors eye Q1 earnings, with AWS growth estimates raised to 29-30% and advertising revenue emerging as a key profit driver.

Amazon shares have surged to a fresh 52-week high of €225.55 — or $225.40 on the U.S. side — ahead of what Wall Street is already calling "Super Bowl Wednesday." The stock has gained more than 30% over the past month alone, and roughly 17% since the start of the year, as investors pile in ahead of the company’s first-quarter earnings release on April 29. But with the bar set so high, the risk of disappointment is equally elevated.

The consensus among analysts calls for quarterly revenue of $177.2 billion, representing 13% year-over-year growth, with adjusted earnings per share pegged at $1.63. Both figures sit at the upper end of Amazon’s own internal guidance. Yet the real action — and the source of last-minute revisions — centers on Amazon Web Services.

Cloud Growth Estimates Get a Boost

Analysts at Roth have revised their AWS growth forecast upward, now projecting first-quarter expansion of 29% to 30%, compared with the previous market consensus of 28%. The upgrade reflects what the firm describes as accelerating demand for computing power tied to artificial intelligence, particularly in the generative AI segment. Amazon appears to be capturing market share from cloud rivals, strengthening its competitive position.

Bank of America is slightly more conservative, estimating AWS growth at 28% — still three percentage points above the broader Wall Street consensus. BMO analyst Brian Pitz raised his price target to $315, citing channel checks that point to a pickup in AWS activity during the first quarter. Goldman Sachs has set a $290 target, highlighting rising advertising returns as a structural tailwind alongside the cloud business.

The cloud unit’s margin is projected at 35.7% for Q1, a notable drop from the 37.7% analysts expected back in October. The wide range of estimates — from 30.9% to 40.0% — underscores the uncertainty surrounding the figure. In the fourth quarter of 2025, AWS grew 24%, its fastest pace in 13 quarters, and CEO Andy Jassy told shareholders that AWS’s AI-related revenue is running at an annualized rate of $15 billion.

Advertising Emerges as a Second Growth Engine

Beyond cloud computing, Amazon’s advertising business has become a critical profit driver. In Q4 2025, ad revenue hit $21.3 billion, up 23% year-over-year — well ahead of the company’s overall revenue growth rate. Goldman Sachs sees rising ad returns as a structural growth lever that complements AWS.

Of the 45 analysts covering Amazon, 42 rate the stock a buy. Morgan Stanley maintains an "Overweight" rating, calling Amazon one of the most direct beneficiaries of the AI infrastructure boom.

The $200 Billion Question

Investor attention will also focus on Amazon’s capital expenditure plans. The company has ramped up spending dramatically, from roughly $53 billion in fiscal 2023 to nearly $200 billion projected for the current year. The bulk of that investment is flowing into data centers and custom chip development. Management will need to provide clear signals on when these outlays will begin generating returns.

A key topic in the earnings call will be the expanded partnership with Anthropic and how it is driving cloud utilization. If AWS can sustain its growth momentum into the second half of the year, that would provide fundamental support for the recent rally.

Headwinds Beneath the Surface

Not everything is running smoothly. North American retail margins are expected to come in at 6.5%, while international operations are seen at 3.2%. Rising fuel costs are squeezing logistics margins, and tariff risks along with higher energy prices are weighing on both segments.

Bank of America expects Amazon to guide for Q2 revenue between $185 billion and $190 billion, with operating income in the range of $17.5 billion to $21.5 billion. If the company hits those targets and maintains margins, the market is likely to view it as a confirmation of strength. A miss on the outlook — or any sign of weakness in AWS — could quickly reverse the stock’s recent gains.

Amazon, Alphabet, Microsoft and Meta all report on the same day, collectively representing nearly one-fifth of the S&P 500’s market capitalization. The market is primed for volatility, and any deviation from expectations will be magnified.