Amazon's Pre-Earnings Surge: Analysts Rally Behind Cloud and Satellite Bets

Bank of America and KeyBanc raise Amazon price targets ahead of earnings, citing robust cloud growth, AI partnerships, and strategic moves into satellite connectivity.

Two major Wall Street banks have significantly raised their price targets for Amazon, citing robust cloud growth and strategic expansion into satellite connectivity. The bullish notes from Bank of America and KeyBanc, both issued on April 20, arrive just days before the tech giant's critical first-quarter earnings report on April 29.

Bank of America analyst Justin Post increased his target to $298, while KeyBanc went even further, lifting its objective to $325. Both firms maintained their buy-equivalent ratings. The upgrades reflect strong confidence in Amazon Web Services (AWS), with BofA specifically raising its Q1 AWS growth estimate to 28% year-over-year, above the Street's expectation of 25%. KeyBanc analysts anticipate AWS growth could rebound to around 30%.

Financial Forecasts and Satellite Costs

The analyst optimism is backed by substantial financial projections. Bank of America estimates Q1 revenue of $178.4 billion and an operating profit of $21.4 billion, both exceeding consensus. The bank highlighted Amazon's AI partnership with Anthropic as a key driver, potentially contributing an incremental $1.3 billion in AWS revenue sequentially.

Looking further ahead, KeyBanc forecasts earnings per share approaching $10 by 2027, basing its $325 price target on a 33x multiple of that estimate. However, the bank also cautioned about near-term pressures. It expects higher investment costs for the Amazon Leo satellite network and elevated energy prices to weigh on operating results in the first half of 2026. Amazon itself anticipates Leo-related costs to be roughly $1 billion higher this year compared to 2025.

Strategic Moves Beyond the Cloud

Beyond cloud computing, Amazon is aggressively building out its satellite and financial ecosystems. Its Project Kuiper subsidiary recently unveiled a new high-speed aircraft antenna capable of download speeds up to one gigabit per second. Initial contracts with Delta Air Lines and JetBlue have been signed, with installations scheduled to begin in 2027.

The satellite business also secured its first live sports deal. The DP World Tour, Europe's professional golf tour, will utilize the Amazon Leo network for 42 tournaments annually starting in 2026, handling live scoring, fan apps, and broadcast production. The network, which operates over 3,000 satellites at an altitude of approximately 640 kilometers, competes directly with SpaceX's Starlink. To support this global infrastructure, Amazon is constructing more than 300 ground stations, following its nearly $11 billion acquisition of satellite operator Globalstar.

In a parallel move to deepen customer ties, U.S. Bancorp confirmed it will take over issuance of Amazon's business credit cards starting in the third quarter. The cards will run on the Mastercard network. The deal involves integrating existing credit balances worth $1.6 billion and transitioning approximately 70,000 business clients to the new provider.

Market Performance and the Earnings Test

Amazon's stock currently trades around €209. Despite a slight daily loss recently, shares are up nearly 18% for the month and stand about 38% above their 52-week low from April 2025. The recent rally brings the stock within striking distance of its all-time high near €220.

All eyes are now on the April 29 earnings release, where AWS performance will be the paramount metric. The cloud division generated $29.3 billion in revenue in the year-ago quarter. Sustained growth at or above 20% is seen as crucial to justifying the company's massive capital expenditure strategy. A significant slowdown could raise questions about whether Amazon's investments are outpacing actual demand. KeyBanc's elevated price target suggests substantial upside potential, but it is squarely contingent on the quarterly numbers delivering.