Amazon (AMZN) will report its fourth-quarter earnings after the bell on Thursday, February 5, with an expected heavy focus on its AI efforts. Questions continue to surface around overspending, and a bubble continues to dog the AI trade. However, AMZN hasn’t shied away from making AI a focal point of its new business strategy. Indeed, AI has reaped benefits for Amazon and its stock, with shares up 34% in the last five years. However, the growth has slowed in the last few months, leading to questions surrounding its upcoming earnings.
For Q4 2025, Amazon is expected to report earnings per share (EPS) of $1.96 on revenue of $211.5 billion, up from $1.86 and $187.8 billion in the same period last year. That represents a 5% jump in EPS and a roughly 13% increase in revenue. Amazon’s all-important AWS segment is expected to top out at $34.9 billion, a 21% jump from the $28.8 billion the company reported last year. Additionally, online store sales are expected to hit $82.3 billion, up 8.9% year over year. Amazon’s advertising segment, which accounts for an increasingly large slice of the company’s overall sales, is expected to report revenue of $21.2 billion.
What to Focus on in Amazon’s Next Quarterly Earnings Report
A focus for the upcoming report, according to Wall Street, besides revenue, will be Amazon’s capital expenditures. The company spent $34.2 billion in cash capex in Q3 and is expected to increase that to $34.9 billion in Q4. Much of that spending is expected to go to AI data centers and continued investment in software/AWS. The company’s CFO Brian Olsavsky said during the company’s Q3 earnings call that the company was on pace to spend $125 billion in 2025 and would continue to ramp that in 2026 as the cloud giant works to meet demand for AI.
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Furthermore, Amazon’s spending could prove helpful for chip and infrastructure companies. Still, as Meta’s and Microsoft’s divergent trajectories in the stock market over the past week have shown, Wall Street appears to be especially on edge when it comes to capex. If Amazon’s 2026 spending projections are too much for traders to swallow, the company’s stock price could take a big hit.
Before earnings, Amazon (AMZN) stock has bullish forecasts for the year, ranging from from $244 to $340, suggesting potential upside from the current market price of $224. Cantor Fitzgerald was the latest to reiterate an Overweight rating on AMZN with a price target of $260.