Key insights
- BofA Securities maintains a Buy rating on Amazon, highlighting its Project Kuiper satellite internet initiative. With over 300 satellites in orbit and accelerating deployment, the project is nearing operational readiness and commercial launch. Potential revenue streams from enterprise, government, and mobile services could be substantial, potentially reaching billions annually by 2032. This development could positively impact Amazon's stock by diversifying its revenue and tapping into new high-growth markets.
Investing.com -- BofA Securities reiterated its Buy rating and $310 price target on Amazon (NASDAQ: AMZN), saying the company’s Leo satellite internet project is approaching an operational tipping point as deployment accelerates and commercial services near launch.
The firm said Amazon has increased its launch cadence during the second quarter and now has more than 300 satellites in orbit. The report expects launch activity to continue to ramp through 2026 and 2027, helping to move the project closer to broader commercialization.
According to the report, Amazon could spend roughly $25 billion to build its initial satellite constellation through 2028, excluding consumer equipment costs.
The firm estimates direct income statement expenses related to the project will reach approximately $1.3 billion in the second quarter and rise to $1.6 billion in the third quarter before declining in the fourth quarter as production and launch costs begin to be capitalized.
The report said enterprise, government, and direct-to-device mobile services could eventually generate revenue comparable to or greater than that of consumer broadband subscriptions.
Amazon has already secured agreements with customers, including Delta Air Lines, the U.S. Department of Defense, Airbus, and Apple, according to the note.
BofA estimates Amazon’s consumer broadband opportunity could reach approximately $14 billion in annual revenue by 2032, assuming the company captures 25% of the market.
The report added that enterprise and government services could contribute an additional $6 billion to $11 billion in annual revenue over the same period.
The firm estimates Amazon will need roughly 13 million subscribers to reach breakeven under its base-case assumptions, which include a five-year satellite replacement cycle and a monthly subscription price of $50.
Amazon plans to broaden Leo service availability during the third quarter, after beginning a preview program for select enterprise customers in late 2025.
The company has also indicated it expects to begin capitalizing satellite and launch investments in the fourth quarter once the network reaches technical feasibility.
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