Amazon (AMZN) stock is up about 14.63% year to date, at the time of writing, Monday afternoon, June 1. Meanwhile, the SPDR S&P 500 Index (SPY) is up about 11.01% in the same period.
And while Amazon has just slightly outpaced the S&P 500, it has also outpaced all but two Magnificent 7 members in the same period.
Here is how the other Magnificent 7 members have performed:
- Alphabet (GOOGL) is up 19.95%.
- Nvidia (NVDA) is up 18.03%.
- Apple (AAPL) is up 12.81%.
- Microsoft (MSFT) is down 4.74%.
- Tesla (TSLA) is down 6.19%.
- Meta (META) is down 6.8%.
We can see that Amazon is slightly behind Nvidia and Alphabet. Considering how heated the artificial intelligence race has become, being the third-best-performing member of the Magnificent 7 is not that bad.
The company has been working on a very big project for several years, and Bank of America believes it is time to assess the impact it will have on Amazon’s performance.
Recent news for AMZN:
- The company reported strong Q1 earnings.
- Amazon invested in OpenAI.
- The company invested in Anthropic.
- Amazon launched Alexa for Shopping.
Key facts about Amazon Leo
Amazon’s Project Kuiper began in 2018 as an idea to provide broadband internet via Low Earth Orbit satellites to customers and communities beyond the reach of existing networks, according to SpaceNews.
It was renamed to Amazon Leo in November 2025.
Amazon plans to launch its initial satellite constellation with more than 3,000 satellites. The term “constellation” refers to a group of satellites designed to work together.
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According to Amazon, Low Earth Orbit is the area of space extending up to 2,000 kilometers (about 1,243 miles) above Earth. The company said satellites will orbit between 590 and 630 kilometers (about 367 and 392 miles).
Amazon shared in April that it would acquire Globalstar, absorbing its existing satellite operations, infrastructure, and assets — including mobile satellite services spectrum licenses with global authorizations. This acquisition will make it possible for Amazon Leo to add direct-to-device services to its Low Earth Orbit satellite network.
Amazon and Apple confirmed that Amazon Leo will power satellite services for iPhone and Apple Watch, including Emergency SOS via satellite.
Bank of America believes Leo is approaching the operational tipping point
In a research note shared with me, Bank of America analyst Justin Post and his team updated their opinion on Amazon stock.
Analysts wrote: “Amazon has stepped up its launch cadence with 3 launches already in [second quarter (Q2)], and over 300 satellites in space as of mid-May.”
The team said they believe Leo is on the cusp of generating revenue, as satellite launches have accelerated in Q2.
Relying on publicly available data and not including consumer equipment costs, the team estimates that building the initial constellation will cost Amazon about $25 billion through 2028.
Analysts estimate Leo will lead to $1.3 billion in direct income statement expense in Q2 and $1.6 billion in Q3. Following Q3, costs should decline sequentially.
The team noted that, even though monthly consumer subscription revenues are a core business case for Leo, they believe that enterprise, government, and mobile direct-to-device revenues could surpass them.
They estimated Amazon’s consumer broadband revenue potential at $14 billion in 2032.
Post reiterated a buy rating for Amazon stock and the target price of $310, based on his sum-of-the-parts analysis that values AWS at 9x 2027 sales estimates, first-party retail at 1.0x, third-party retail at 2.5x, and advertising at 5.0x.
Analysts noted downside risks for Amazon:
- Increasing competition from offline and local retailers.
- Market share loss to cloud competitors with advanced AI technology.
- Elevated AWS investment needs that could pressure margins.
Analysts also said the stock has been subject to significant volatility in the past, and that volatility could increase amid economic uncertainty.
What do other analysts think, and how does Bank of America’s opinion compare?According to MarketBeat, 57 of the 60 analysts covering Amazon stock rate it a buy. Only three give a hold rating. The average price target is $312.83.
