MW The most important Amazon earnings figure comes with a high bar this time
By Christine Ji
To impress investors, Amazon will need to show continued momentum in its cloud-computing business - but the real number to beat may be higher than the consensus view of 21% growth
Amazon's cloud business grew 20% year-over-year in the third quarter of 2025. Investors will be looking for another acceleration.
Amazon.com still has some work to do to shake its reputation as an artificial-intelligence laggard, but so far this year, its stock is holding up better than some of its Big Tech rivals.
Amazon's (AMZN) stock is up 3% year-to-date - making it the third-best performing "Magnificent Seven" stock in 2026 - after badly lagging behind many of its peers last year. Amazon's fourth-quarter earnings report on Feb. 5 will determine whether the stock continues to trend upward.
"While we don't expect 4Q earnings to be the magic bullet thatchanges these fortunes, we do expect another positive earnings outcome to continue to chip away at this underperformance and believe Amazon can be one of the largest outperformers in our coverage in 2026," Deutsche Bank analyst Lee Horowitz wrote in a note this week.
Analysts polled by FactSet project $211.4 billion in revenue and $1.97 in earnings per share for Amazon's December quarter.
The main focus of the earnings report will be on Amazon Web Services, as investors will see if the cloud business can maintain revenue growth above 20% following last quarter's reacceleration. Both Horowitz and UBS analyst Stephen Ju believe the "bogey" for the quarter, or the real benchmark to beat, sits at 23%. This could be a difficult hurdle for AWS, as consensus estimates are projecting 21% growth.
However, some analysts see long-term potential for AWS beyond tomorrow's earnings call. Amazon has announced plans to double its capacity by 2027, which Wall Street hasn't priced in yet, Ju wrote in a note this week.
"We believe AWS offers one of the clearest growth [reacceleration] narratives," Jefferies analyst Brent Thill wrote in a note earlier this week, pointing to recent landmark deals with OpenAI and Anthropic as signs of an increasing cloud-revenue backlog. Jefferies's latest industry checks suggest that enterprise sentiment toward AWS is rebounding as it continues to scale up its Project Rainier data centers for its primary cloud partner Anthropic.
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Outside of AWS, Amazon's other businesses will have an opportunity to prove to investors that AI is enhancing margins and driving monetization.
In addition to investing in cloud capacity, Amazon has been focusing on increasing efficiencies in its delivery network. Amazon has been expanding its footprint in grocery delivery to compete with companies like Walmart $(WMT)$, making a big push into same-day delivery for perishables. It's also planning on building a 230,000-square-foot hybrid grocery store in Illinois, which Thill called "a potential pivotal experiment" that could lead to more physical stores if successful.
Strength in Amazon's lucrative advertising business could also improve margins overall, according to analysts. Ju sees Prime Video as an especially potent growth lever, noting that the international rollout of video ads presents "further upside to estimates."
Horowitz anticipates that strong advertising revenue could boost operating income in the fourth quarter. He anticipates $25.7 billion of advertising revenue, higher than Wall Street's consensus estimate of $24.8 billion. Last quarter, Amazon recorded $17.7 billion of advertising revenue.
Read: Amazon will cut 16,000 jobs, adding to the tech sector's new wave of layoffs
-Christine Ji
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February 04, 2026 09:14 ET (14:14 GMT)
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