Amazon.com Inc (NASDAQ:AMZN)’s low Earth orbit (LEO) satellite initiative is approaching a key operational milestone as deployment activity accelerates and commercial service moves closer to launch, according to research from Bank of America.
The firm wrote that Amazon’s satellite project is "on the cusp of generating revenues," with satellite launches accelerating during the second quarter and commercial service expected to begin in the third quarter.
Bank of America expects investor interest in the initiative to increase as the network build-out progresses.
Amazon has completed three satellite launches during the second quarter and had more than 300 satellites in orbit as of mid-May. Bank of America expects the launch pace to continue accelerating, projecting four launches in the second quarter and 17 launches in 2026, with additional launches planned for 2027.
The bank estimated Amazon could invest approximately $25 billion through 2028 to build its initial satellite constellation, excluding consumer equipment costs.
It also forecast direct income statement expenses related to the project of about $1.3 billion in the second quarter and $1.6 billion in the third quarter. Those costs are expected to decline sequentially in the fourth quarter as Amazon begins capitalizing production and launch expenses.
Bank of America wrote that while consumer broadband subscriptions remain a core component of the business case, enterprise, government and direct-to-device (D2D) mobile services could ultimately generate revenue comparable to or greater than consumer offerings.
The analysts highlighted customer agreements involving Delta Air Lines, the US Department of Defense, Airbus and Apple. Bank of America also pointed to Amazon’s recent acquisition of Globalstar and the company’s plans to begin mobile satellite deployments in 2028.
Looking ahead, the firm estimated Amazon’s consumer broadband business could generate approximately $14 billion in annual revenue by 2032, assuming the company captures a 25% share of the consumer satellite internet market. Enterprise and government services could contribute an additional $6 billion to $11 billion in annual revenue, according to the projections.
Bank of America also identified potential synergies between the satellite network and Amazon’s existing businesses, including Amazon Web Services and the company’s logistics operations.
The firm reiterated its ‘Buy’ rating on Amazon, citing what it views as a compelling long-term opportunity with the potential for positive returns on investment and strong margins supported by high barriers to entry in the satellite communications market.
Shares of Amazon traded down 3% at about $262 on Monday afternoon.