Amazon's Feb. 5 Earnings Could Reset the Stock's Narrative

2026-02-04 08:05:56

The wait is almost over. After 12 months of relatively flat returns, Amazon stock is about to get a major refresh—and Feb. 5 might be the inflection point investors have been waiting for. The company is scheduled to release its Q4 2025 operating results on that date, and this report could finally showcase just how much AI is transforming both its powerhouse cloud business and its massive e-commerce operation. The market has been underestimating Amazon’s profitability engine, but Feb. 5 earnings reveal should change that conversation fast.

AWS Order Backlog Hits $200B: What Feb. 5 Earnings Will Reveal

Amazon Web Services isn’t just the world’s largest cloud computing platform—it’s become the epicenter of the AI revolution. The numbers tell the story. By the end of Q3 2025, AWS had accumulated a stunning $200 billion order backlog, a clear signal that demand for AI infrastructure vastly outpaces supply. That backlog alone is one of the most reliable indicators of future revenue momentum, making it the focal point when the Feb. 5 report hits.

Here’s why: AWS is stacked with premium hardware from Nvidia and other suppliers, but Amazon has also engineered its own chips—Trainium and Inferentia—specifically optimized for AI workloads. The latest Trainium2 can deliver up to 40% better price-to-performance than competing options when training AI models, which is why leading AI companies like Anthropic are deploying up to 1 million of them.

Beyond chips, AWS offers Bedrock, a managed platform hosting hundreds of pre-built foundation models from Anthropic, Mistral, and Meta Platforms. This is huge for businesses that want to deploy AI fast without building from scratch. Through the first nine months of 2025, AWS generated $93.1 billion in revenue—up 18% year-over-year—with AI serving as the primary growth driver. The Feb. 5 earnings call will shed light on whether this momentum can sustain and accelerate.

AI-Driven Profitability Surge Ahead of Feb. 5 Report

While e-commerce remains Amazon’s largest revenue source, AWS is where the real profit magic happens. Through Q3 2025, AWS accounted for 60% of the entire company’s operating income—a remarkable concentration of earnings power. But that’s not the only profitability story worth watching.

Amazon’s e-commerce logistics have undergone a dramatic transformation since 2023. The company has systematically reduced costs across its fulfillment network while simultaneously investing in AI-powered tools like Project Private Investigator, which automatically detects product defects before items ship. This dramatically cuts returns and refunds, both massive cost levers.

The combined effect? Amazon’s earnings per share surged to $5.22 during the first three quarters of 2025—up 42% from the prior year. More impressively, the company has beaten Wall Street’s consensus earnings estimates in all three quarters by an average of 22%. That track record matters. When Amazon reports its Feb. 5 results, the Street will be eyeing a Q4 EPS figure of $1.95 (according to Yahoo! Finance). If the company exceeds this by its typical margin, it could signal even stronger underlying business momentum.

Trading at Fair Multiples: Why Feb. 5 Could Unlock Stock Upside

At current levels, Amazon’s valuation looks reasonable relative to its high-quality peer group. The stock trades at a P/E ratio of 33.8, nearly identical to the Nasdaq-100’s 32.6. Hardly expensive, though not a screaming bargain either.

The real opportunity emerges when you look forward. Wall Street projects Amazon will earn $7.88 per share in 2026, implying a forward P/E of 30.5. But here’s the catch: If the company maintains its pattern of beating estimates by 22% on average, the actual forward earnings could land at roughly $9.61 per share—putting the current stock price at a significantly more attractive forward multiple.

Feb. 5 is the catalyst that could validate this thesis. A strong Q4 report paired with constructive guidance would provide the evidence investors need to justify Amazon’s long-term investment case. The question isn’t whether Amazon is a quality company—it clearly is. The question is whether the Feb. 5 earnings report can break the stock out of its current holding pattern and reignite investor enthusiasm for its AI-powered transformation.

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.