Bank of America Says AWS Capex Returns Will Drive Amazon.com (AMZN) Shares

Amazon.com, Inc. (NASDAQ:AMZN) is one of the 10 AI Stocks Analysts Are Watching. On February 8, Bank of America reiterated the stock as “Buy,” anticipating that “AWS capex returns will be the top stock driver” for AMZN. The firm’s review of the company’s 10-K had led to this conclusion.

“We think returns on AWS AI capex will be top stock driver for several years, and while the capacity ramp will add to quarterly margin volatility for AWS, we think this capacity will be fully utilized as part of the AI-driven transformation across industries and will help Amazon maintain competitiveness in a very attractive sector.”

Amazon has announced that its capex is set to rise by over 50%, an increase from almost $130 billion in 2025 to a total of $200 billion. Most of the spending, it noted, will be directed toward AWS. This announcement significantly beats analyst expectations, which had been around $150 billion.

“Amazon is not alone in this investment, and we think it makes sense that Amazon is investing more than competitors give AWS’ leading customer and revenue base.”

Amazon.com Inc. (AMZN) is an American technology company offering e-commerce, cloud computing, and other services, including digital streaming and artificial intelligence solutions.

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Disclosure: None. This article is originally published at Insider Monkey.