Amazon (NASDAQ:AMZN) heads into this afternoon’s hyperscaler earnings wave, with the market close set to trigger quarterly reports from the major cloud players. The Q1 readout arrives at a favorable moment for the company, as growing investor confidence in its AI positioning has helped push the shares to new highs in recent sessions.
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New trading tool for AMZN bullsLooking ahead to the print and incorporating incremental disclosures related to scaling chip and AI-driven revenue at AWS, along with new cloud agreements involving OpenAI, Anthropic, and Meta, Mizuho analyst Lloyd Walmsley has increased his Amazon estimates.
Walmsley, who ranks among the top 2% of Street stock experts, now forecasts total revenue of $806 billion and $894 billion for 2026 and 2027, respectively, up from prior estimates of $802 billion and $892 billion. For AWS, the analyst is calling for revenue of $165 billion in 2026 and $203 billion in 2027, exceeding consensus expectations of $161 billion and $200 billion. For Q1, he anticipates AWS revenue growth of 27% year over year, reaching $37.0 billion, compared to the Street’s $36.7 billion estimate.
“We see capacity as the key to scaling AWS revenue near-term and while we have limited visibility into specifics around the ramp on Trainium 3, we know that it started shipping in early 2026,” the 5-star analyst said.
Walmsley also notes that rising demand for Graviton chips “can be more easily scaled” compared to Trainium. His estimates do not factor in direct chip sales, which could accelerate demand and revenue if the company has sufficient supply and ultimately decides to pursue that strategy.
“We believe the buy-side is looking for growth >30% at AWS in 1Q. While demand trends would support this, we do not model this given our lack of visibility into capacity additions,” Walmsley added.
Elsewhere in the business, based on U.S. Census data covering non-store retail sales, there appears to be “upside risk” for North America retail revenue. Non-store retail sales showed acceleration in Q1, and Walmsley’s analysis suggests top-line growth of 10–15% year over year. Data from Pacvue also indicates solid momentum in the retail advertising market, serving as a useful proxy for underlying GMV trends.
Regarding the operating income (OI) guide, there is some modest risk to Q2 expectations due to elevated energy costs. Historically, the high end of the Q2 OI guide has ranged between 82% and 115% relative to the first-quarter report. The current setup resembles 2022, when higher fuel expenses and labor inflation resulted in an approximately $2 billion impact. While the timing appears similar this year, fuel surcharges have been implemented more quickly. At the same time, Walmsley sees potential upside to Q1 performance from both the retail segment and AWS, which could carry through into Q2.
“Bottom line – if they can guide ex fuel similarly to Street, we don’t believe an optical below-Street guide will matter,” Walmsley summed up.
All told, ahead of the print, Walmsley assigns AMZN shares an Outperform (i.e., Buy) rating, while raising his price target from $315 to $325, suggesting gains of 25% are in store over the coming months. (To watch Walmsley’s track record, click here)
Most of Walmsley’s colleagues back his take. Based on a mix of 40 Buys vs. 2 Holds, the analyst consensus rates the stock a Strong Buy. The forecast calls for 12-month returns of 11%, considering the average target clocks in at $289.05. (See AMZN stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.