Amazon and these four tech stocks can benefit most from the next AI wave, according to Bank of America

Bank of America identifies Amazon and four other tech stocks as key beneficiaries of the upcoming "agentic AI" wave, expected to peak around 2026. Amazon's cloud computing and retail efficiencies position it as a top pick, with projected AWS growth of 21%. Other highlighted companies include AppLovin, Wayfair, Expedia, and Roblox, each leveraging AI to enhance their services. The report emphasizes a shift in advertising strategies as AI influences consumer behavior, leading to increased investment in closed online ecosystems.

By Christine Ji The next phase of the AI trade will depend on autonomous agents. These five stocks could lead the rally. Amazon's investments in cloud computing and delivery logistics could make it a major winner in the agentic AI era, according to Bank of America. While there has been much talk about the artificial-intelligence trade becoming overhyped, Bank of America believes "peak optimism" is still ahead of us. For the past two years, the AI sector has been defined by chatbots and large language models, but 2026 is shaping up to be the year of "agentic AI," or software that can execute tasks autonomously, according to a Wednesday report from the bank. The AI trade won't reach its peak until the most "highly visible AI decacorns," or AI startups valued at over $10 billion, hit the public market, according to analyst Justin Post. That includes names such as OpenAI, Anthropic and xAI, which have been speculated to be potential 2026 IPO candidates. Until then, the investing opportunity lies in companies deploying agents that can shop, book travel and carry out other actions. Post flagged Amazon.com (AMZN), AppLovin (APP), Wayfair (W), Expedia Group (EXPE) and Roblox (RBLX) as the best-positioned beneficiaries of an agentic-AI revolution. More: SpaceX, Anthropic and 4 more companies that could make an IPO splash in 2026 Among the megacap tech names, Amazon remained Bank of America's top pick for the first quarter of 2026 as Post bet on continuing reacceleration of Amazon Web Services, along with efficiencies in the retail business. Wall Street estimates are modeling 21% growth in AWS, a number that Post said could be beaten as Amazon enters 2026 with more cloud capacity and improved infrastructure. AWS plans to add 1 gigawatt of power capacity in the fourth quarter alone and double its total capacity by 2027. Amazon has also made strides in its custom Trainium chip offering, improving efficiency and compute power with its latest Trainium3 product. Post said that future versions of the chip will integrate with Nvidia's (NVDA) technology, potentially making AWS the lowest-cost provider for AI workloads. On the retail-business side, Amazon is driving margin growth through advertising growth, better inventory management, robotics and reduced headcount. With a fleet of over 1 million robots and more-efficient logistics hubs, Amazon's retail margins are expected to expand from 6.1% in 2025 to 8.3% by 2027, Post wrote. Both Amazon's retail and cloud businesses position the company to be the default infrastructure for agentic commerce. Post noted that Amazon has over 40% U.S. e-commerce share due to its Prime offering. Amazon's on-site AI Rufus, which currently gives shopping recommendations and tracks prices, could eventually be upgraded to offer "full agentic capabilities," Post wrote. He also noted potential for an agentic shopping deal between Amazon and OpenAI in 2026, which Post suggested would likely be structured to include an advertising revenue share. Read: What will it take for Amazon's stock to finally take off? Wayfair has made strides in the furniture shopping niche by being an early partner for Google's (GOOGL) (GOOG) agentic-checkout feature. The company has also developed an autonomous AI assistant to handle common inquiries. Analyst Mike McGovern highlighted that the company's CastleGate logistics platform, which uses AI to optimize inventory placement, has boosted sales. Post said travel will be a "key battleground" for agentic AI in 2026, as it involves multistep planning that players are racing to automate. Expedia is successfully pivoting from a traditional booking site to an infrastructure provider for new AI travel agents, Post wrote, citing its partnerships with OpenAI for an app in ChatGPT and Google's Gemini for agentic bookings. As people increasingly use AI to shop and book travel, Bank of America said human traffic on the internet will decrease, meaning that advertisements on the open web will receive fewer eyeballs. As a result, advertisers are shifting their dollars to "walled gardens," or closed online ecosystems where the platform owner controls the content. Mobile marketing provider AppLovin's presence in the mobile-gaming industry and expansion into e-commerce protect it from these industry headwinds, according to Bank of America analyst Omar Dessouky. Ads within mobile games see much attention, making them potentially more persuasive for consumers. AppLovin's Axon product, which uses AI to target ads to likely buyers, is seeing a surge in adoption from online merchants. Roblox is also developing an ad initiative that, while early, could turn the platform into a "major ad destination" thanks to its massive and highly engaged base of roughly 150 million daily active users, Dessouky added. Beyond ads, agentic AI tools such as Roblox's Studio Assistant could significantly increase the rate at which developers launch new games, serving as a key growth driver. Don't miss: Is a new OpenAI deal what Amazon's stock needs to finally come alive? -Christine Ji This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. (END) Dow Jones Newswires 01-08-26 1126ET