Bank of America: Maintains "Buy" rating on Amazon, optimistic about significant revenue opportunities with Amazon Leo

Bank of America Securities published a research report stating that Amazon's acquisition of mobile satellite service operator Globalstar is expected to be completed by 2027. This acquisition will enhance Amazon's own next-generation mobile satellite system and expand network coverage. Amazon also announced the extension of the agreement with Globalstar to provide satellite services for iPhones and Apple Watches, and indicated that the two companies will collaborate on future satellite services. Management stated that commercialization of its satellite network service Amazon Leo is expected to take place in the middle of this year, and Globalstar will assist in accelerating network monetization with its existing customer base and capabilities. Although the bank expects the company to record losses of $1 billion and $1.4 billion in the first and second quarters, respectively, during the expansion of the Amazon Leo business, the company expects the project to reach technical feasibility as early as the third quarter, allowing for capitalization of investments. The bank believes that there are significant revenue opportunities as Amazon Leo scales up and maintains a "buy" rating on Amazon with a target price of $275.