Amazon.com Inc (NASDAQ:AMZN) is set to report its fourth quarter 2025 earnings on Thursday, with UBS analysts modestly lifting their price target and increasing expectations for cloud revenue and capital spending as the company expands infrastructure capacity.
UBS lifted its 12-month price target to $311 from $310 and reiterated a ‘Buy’ rating, citing growing confidence in Amazon Web Services (AWS) growth and longer-term free cash flow potential. The firm’s price target implies upside from current levels of about $237.
The analysts said Amazon shares remain “a coiled spring,” arguing that neither they nor the broader market are fully pricing in the possibility that AWS revenue could double by 2028 following increased capital intensity.
UBS raised its AWS revenue assumptions and significantly increased its capital expenditure forecasts as Amazon ramps up infrastructure to support cloud and AI demand.
The analysts wrote that Amazon plans to “double capacity by 2027,” prompting them to lift aggregated Q4 2025 to Q4 2027 capital expenditures to $344 billion from $300 billion, including an increase in AWS spending from $225 billion to $260 billion. They added that a doubling of AWS revenue by 2028 “should result in an incremental ~$20B in free cash flow for 2028.”
The firm expects the fourth quarter to mark the second consecutive period of accelerating AWS growth and believes this could boost investor confidence. “As Q4 2025 results marks the second quarter of AWS acceleration, we expect investor conviction to continue to rise and drive outperformance as capital continues to rotate into AMZN shares,” the analysts wrote.
Beyond cloud, UBS highlighted potential upside from faster gross merchandise volume growth and market share gains driven by expanded one-day and same-day Prime delivery, including groceries, as well as improving e-commerce margins from fulfillment regionalization and logistics efficiency.
The analysts also pointed to “high-margin revenue potential from Prime Video with ads” and additional upside from investments across e-commerce, content, and low Earth orbit initiatives, which they said could support advertising and data-access revenue and lift free cash flow estimates.
Wall Street analysts, on average, expect Amazon to report a 12.7% year-over-year increase in revenue to $211.56 billion and earnings per share of $1.98, up from $1.86 in the year-ago quarter.