Amazon (AMZN) stock hit a record highs on Feb. 4 and its market cap topped $2.5 trillion. While the stock is lower in early trading Wednesday due to a broad-based tech selloff following Alphabet’s (GOOG) Q4 revenue miss, it is still outperforming the S&P 500 Index ($SPX) this year. Amazon will report its Q4 earnings tomorrow, Feb. 6, after the markets close. As has typically been the case over the last several quarters, several analysts are bullish on AMZN stock heading into the confessional. In this article, we’ll examine Amazon’s Q4 earnings estimates and analyze whether the stock is a buy after rising to record highs.

Amazon Q4 Earnings Estimates

Analysts expect Amazon’s revenues to rise 10.2% year-over-year to $187.2 billion. During its Q3 earnings call, Amazon forecast Q4 revenues between $181.5 billion and $188.5 billion. However, the company’s guidance at the midpoint was below what analysts were modeling, similar to what we saw in the previous quarter.

Amazon’s earnings per share (EPS) are expected to rise by 50% in Q4. Although the company does not provide EPS guidance, it forecast Q4 operating income of between $16 billion and $20 billion, compared to $17.4 billion in Q3. Over the last few quarters, while Amazon’s top line has grown in the low double digits, its profits and free cash flows have surged, thanks to aggressive belt-tightening.

Amazon entered 2025 as Wall Street’s favorite “Magnificent 7” stock and hasn’t disappointed bulls so far. It is the second-best performer in the coveted group after Meta Platforms (META) and has continued its rally from where it left off last year.

AMZN Stock Forecast

Several brokerages named Amazon their top pick for 2025 and analysts have maintained their bullish bias heading into the e-commerce giant’s Q4 confessional. Telsey expects Amazon to report strong earnings on the back of healthy holiday sales while Citi expects the company to report better-than-expected earnings.

Amazon is the highest-rated Magnificent 7 stock by sell-side analysts with the maximum number of “Buy”-equivalent ratings. Of the 49 analysts covering AMZN, 45 have a “Strong Buy” rating while three analysts rate it as a “Moderate Buy.” One analyst rates Amazon as a “Hold” while its mean target price of $256.86 is 4.4% higher than the Feb. 4 closing price. AMZN’s Street-high target of $306 is 26.4% higher than current price levels. 

Should You Buy Amazon Stock?

While betting on an event like quarterly earnings for short-term trade can be risky, I find Amazon stock a good buy from a medium- to long-term perspective. Here’s why.

• Cloud Growth Story Is Back: Amazon’s enterprise-focused Amazon Web Services (AWS) has recovered from the bottoms and looks set to ride the AI wave. The business is high-margin and is the proverbial cash cow for Amazon. Continued growth in that business bodes well for the company’s overall finances and profitability.
• Continued Focus on Efficiencies to Drive Margins Higher: Amazon has cut costs aggressively and continues to work on structural margin expansion, including through automation. The company still has room to improve its e-commerce operating margins – both in the U.S. and internationally.
• AI Opportunity: Amazon is among the most underappreciated AI plays. The company is using AI across its business segments and the technology is helping it lower costs, increase engagement, improve logistics, and earn additional revenue. The company’s AI business is still in its early days and has the potential to be an “AWS-like opportunity.” Notably, while some of the Big Tech peers are struggling to monetize their massive AI investment, AWS’s AI business is at a “multibillion-dollar” run rate and is growing in triple digits, which CEO Andy Jassy says said is three times the growth that AWS witnessed at this stage of its evolution. Amazon also offers its Trainium2 AI chip and Apple (AAPL) is among the companies using these chips to train its AI model, which is a testament to its capabilities.
• Long-Term Growth Projects: Amazon is also a play on long-term growth stories, such as through its business-to-business (B2B) platform, Amazon Business. The business is already running at a multibillion-dollar gross revenue run rate and has the potential to scale up significantly. 

Amazon’s valuations still look reasonable, especially considering the kind of growth it brings to the table. The stock trades at 41x its expected earnings over the next 12 months which does not look demanding. Overall, even as the growth story for some of the other Big Tech peers appears to have stalled – at least in the short term – Amazon is one name that looks like a structural growth story, given its diversified business and presence in multiple high-growth industries.