Bank of America Cuts Amazon Forecast After Delivery Leak: What Internal Documents Reveal
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Key Takeaways
- Bank of America confirmed its Buy rating for Amazon on September 17, 2026 with a $320 price target, despite the disclosure of the $6.8 billion investment in Project Mercury.
- According to leaked internal documents, Amazon plans to expand its same-day delivery network from currently 85 to over 1,000 locations by 2031, enabling same-day delivery to 80 percent of Prime members within a 10-mile radius.
- Project Mercury is expected to become cash flow positive by 2030 and generate $7.1 billion in economic value over ten years, despite modest direct returns.
- The expansion directly targets Walmart's competitive advantage: The retail company operates around 5,000 stores with fast delivery serving 90 percent of the US population within a 10-mile radius.
- Amazon shares rose 2.30 percent to $251.61 on September 17, 2026 after Project Mercury details became public.
Bank of America confirmed its Buy rating for Amazon shares on September 17, 2026 with a price target of $320, after internal planning documents revealed details of a multibillion-dollar expansion of its same-day delivery network. Analyst Justin Post rated the strategic significance of the project higher than its direct financial returns.
Project Mercury: Amazon's Attack on Walmart's Delivery Advantage
The leaked internal documents, reported by Business Insider and analyzed by Bank of America on September 17, 2026, show the scope of Project Mercury: Amazon plans to expand its sub-same-day fulfillment centers from currently 85 locations to over 1,000 by 2031. Each facility will stock approximately 90,000 best-selling items – including household products, Fresh items, and pharmaceuticals.
The goal: By 2031, 80 percent of US Prime members should receive same-day delivery capacity within a 10-mile radius. This would bring Amazon to parity with Walmart, which already serves 90 percent of the US population within this radius through around 5,000 stores. Bank of America called Project Mercury strategically crucial in its analysis from September 17, 2026 to neutralize Walmart's key competitive advantage in fast delivery.
$6.8 Billion Investment with Modest Direct Returns
The internal documents estimate the investment requirement for the first three years at $6.8 billion. Over ten years, the project should generate economic value of $7.1 billion and become cash flow positive starting in 2030. Analyst Post described the direct financial returns as "modest" – the investment represents less than five percent of Amazon's annual retail capital expenditures, according to Bank of America's estimates.
According to Bank of America, the strategic justification lies in long-term effects: A denser fulfillment network combined with advancing automation should improve margins in the retail business over several years. Post also pointed to progress at Amazon Web Services (AWS), proprietary chips, and the Bedrock platform, which position Amazon to benefit from advances in artificial intelligence in both cloud computing and retail.
$320 Price Target Despite Current Valuation at $251
On September 16, 2026, Amazon shares closed at $247.04 on the Nasdaq, down 0.4 percent from the previous day. GuruFocus estimated the intrinsic value at $248.57 – the stock was rated as marginally undervalued. On September 17, 2026, the price rose 2.30 percent to $251.61 after Project Mercury details became public.
Bank of America maintains its $320 price target, representing upside potential of approximately 27 percent compared to the price on September 17. The rationale: The combination of network expansion, retail margin growth, and AI-driven growth opportunities justifies the positive assessment.
Divergent Analyst Opinions
Not all analysts share the optimism. On January 2, 2026, Invictus Origin analyst Oliver Rodzianko downgraded Amazon to Hold, citing valuation risks and macroeconomic uncertainties, despite acknowledging the company's fundamental strength. On May 23, 2026, Wells Fargo lowered its price target from $313 to $312, but maintained its Overweight rating and pointed to growing market confidence in companies monetizing cloud investments.
Bank of America had already confirmed its Buy rating with a price target of $310 on May 31, 2026 – the new target of $320 from September 17, 2026 is ten dollars higher.
Market Environment and Operational Challenges
The price decline on September 16, 2026 coincided with two operational events: First, Amazon reported an AWS outage in the Bahrain region following damage from a drone strike. Second, the company announced significant wage increases for its US workforce – the new entry-level minimum wage is $20 per hour, supplemented by expanded banking and grocery benefits.
In the broader market context, the Nasdaq Composite traded at 26,522.55 points on September 18, 2026 (up 0.39 percent), while the S&P 500 was at 7,643.13 points (up 0.03 percent). The DAX declined 1.35 percent to 25,311.5 points on the same day.