Had you bought Amazon (AMZN 1.30%) stock 12 months ago, you would be sitting on a meager 2% gain right now. The company is making incredible progress in the artificial intelligence (AI) space, which is fueling strong growth across the entire organization, yet its stock has effectively traded flat over the past year.
On Feb. 5, Amazon is scheduled to release its operating results for the fourth quarter of 2025, which will give investors a fresh update on how AI is impacting the company's booming cloud computing and e-commerce businesses.
The report might be the positive catalyst Amazon stock needs to break out of its recent funk. Here's what investors should look for.
Image source: Amazon.
The cloud will be the center of attention
Amazon Web Services (AWS) is the world's largest cloud computing platform. It's a place where businesses can access all the tools they need to thrive in the digital age, but it has also become a top destination for AI developers thanks to its state-of-the-art data centers and other services.
Like most cloud providers, Amazon's data centers are filled with AI chips from top suppliers like Nvidia, and it rents the computing capacity to developers for a fee. However, the company also designed its own chips, called Trainium and Inferentia. The latest Trainium2 chips offer up to 40% better price performance than competing hardware when training AI models, which is why leading start-up Anthropic is using up to 1 million of them.
AWS also gives developers access to the Bedrock platform, which hosts hundreds of completed foundation models from companies like Anthropic, Mistral, and Meta Platforms. Building a model from scratch is expensive and time-consuming, so using a ready-made alternative can help regular businesses bring AI software to market far more quickly.
AWS generated $93.1 billion in total revenue during the first three quarters of 2025, which was up 18% from the year-ago period. AI has been a huge source of the platform's momentum, and in fact, AWS ended the third quarter with a whopping $200 billion order backlog from developers who were waiting for more data center infrastructure to come online.
The backlog will be a key point of focus for investors on Feb. 5, because it's one of the surest indicators of demand.
Amazon regularly beats Wall Street's earnings expectations
AWS is Amazon's most profitable business, accounting for 60% of the entire company's operating income through the first nine months of 2025. E-commerce, on the other hand, is Amazon's largest source of revenue, but it runs on thin profit margins because it aims to provide customers with ultra-low prices, so it typically isn't a big contributor to the bottom line.
NASDAQ: AMZN
Key Data Points
However, Amazon has significantly improved efficiency in its logistics network since 2023, which continues to drive costs down. Plus, it's investing heavily in technology for its fulfillment centers, with new tools like Project Private Investigator, which uses AI to scan products for defects before they are shipped to customers. This reduces returns and refunds, which is another big cost saver.
These efficiency improvements, combined with the solid growth from AWS, are fueling a surge in Amazon's overall profits. The company produced earnings of $5.22 per share during the first three quarters of 2025, which was up by an eye-popping 42% from the year-ago period. Moreover, Amazon beat Wall Street's consensus earnings estimate in all three of those quarters by an average of 22%.
The Street will be looking for fourth-quarter earnings of $1.95 per share on Feb. 5 (according to Yahoo! Finance), so that's the number to beat.
Amazon stock looks attractive heading into Feb. 5
It's never wise to base investment decisions on the results from a single quarter. Instead, it's better to assess each new quarterly report in the context of the company's long-term trajectory. We already know Amazon is one of the highest-quality companies in the world, and its upcoming Feb. 5 report is likely to reinforce that.
Amazon stock currently trades at an attractive valuation, so it could be a great buy heading into the release. Its price-to-earnings (P/E) ratio of 33.8 is roughly in line with the 32.6 P/E ratio of the Nasdaq-100, so you could argue its valuation is fair relative to its big-tech peers. However, Wall Street thinks Amazon's annual earnings will grow to $7.88 per share in 2026, placing the stock at a forward P/E ratio of 30.5.
Data by YCharts.
However, considering Amazon beat Wall Street's earnings estimates by an average of 22% during the first three quarters of 2025, it's possible the stock is significantly cheaper than the numbers suggest right now.
