Amazon(US:AMZN) Zhi Tong Cai Jing·2025-10-24 14:31Core Viewpoint - Bank of America anticipates strong performance for Amazon's retail segment and an optimistic outlook for Amazon Web Services (AWS) ahead of the Q3 earnings report scheduled for October 30 [1] Group 1: Q3 Performance Expectations - Amazon's retail revenue for Q3 is projected at $179.2 billion, exceeding market expectations of $177.7 billion by 1% [2] - AWS revenue is expected to be $32.3 billion, showing a year-over-year growth of 17.7%, which is in line with market expectations of $32.4 billion and an 18.0% growth [2] - The company's operating profit is forecasted at $20.4 billion, surpassing market expectations of $19.7 billion by 4% due to healthy retail sales and strong online advertising performance [2] Group 2: North America Retail Segment Insights - Credit and debit card data indicate an acceleration in online spending for Amazon in Q3, with expectations for North America retail growth to exceed market predictions by 1%-2% [3] - The impact of the "Prime Big Deal Days" event on Q4 is expected to be limited, although online spending during that week showed a solid year-over-year increase of 8.9% [3] Group 3: Q4 Guidance and Market Impact - Q4 revenue guidance is set between $202 billion and $209 billion, slightly below the market consensus of $208 billion, with an expected sequential growth rate of 15.5% [4] - Operating profit guidance for Q4 is estimated at $18 billion to $22 billion, lower than the market consensus of $23.7 billion [4] - Historical performance suggests that Amazon typically exceeds its Q4 guidance, and a strong Q3 performance may lead to an upward adjustment in Q4 guidance [4] Group 4: AWS and Market Sentiment - There are expectations for a shift in communication tone regarding AWS, with potential benefits from the "Rainier Project" expected to materialize by mid-2026 [5] - Amazon's anticipated enterprise value/EBITDA multiple for 2026 is projected at 12.6, below the 10-year average of 16.4, indicating a potential undervaluation compared to competitors [5][6]