Amazon's Q1 2025 Earnings: Strong Growth Amid AI Investments and Tariff Uncertainties

Amazon revenue climbs 9%, but outlook sends shares lower

San Francisco (AFP) - Amazon reported a nine percent rise in first-quarter revenue on Thursday, but its outlook fell below expectations as potential impact from the US-China trade war rattled investors. The online retail behemoth said sales hit $155.7 billion in the January-to-March period, but its share price dropped as much as four percent in after-hours trading on Wall Street. Amazon Web Services, the company's hugely successful cloud business, saw sales jump 17 percent to $29.3 billion, but the gain was slightly below expectations. "We're pleased with the start to 2025, especially our pace of innovation and progress in continuing to improve customer experiences," CEO Andy Jassy said, highlighting new AI offerings including the next-generation Alexa+ virtual assistant. Amazon said it had launched several AI initiatives during the quarter, including Amazon Nova generative AI models, while expanding its Project Kuiper satellite network to compete with Elon Musk's Starlink. Looking ahead, Amazon forecast second-quarter net sales between $159 billion and $164 billion, representing solid growth of seven to 11 percent. But this was lower than what analysts had expected. The outlook is especially sensitive for investors with speculation high on how the wave of high trade tariffs announced by President Donald Trump's administration will affect Amazon's performance. Trump has most notably slapped 145 percent levies on China, where many US-bound products are made, though he as given exceptions on electronics and other items for now. There is also uncertainty around whether tariffs will slow spending -- the US economy already showed a contraction in the first quarter of the year. Jassy said the company had yet to see any reduction in demand since Trump announced his tariffs a month ago even if "to some extent, we've seen some heightened buying in certain categories" as shoppers anticipate price hikes. Still, "most sellers (on Amazon) just haven't changed pricing yet," he added, while insisting that Amazon wasn't particularly exposed to China. A report earlier in the week that Amazon was going to display the extra cost of the levies for customers on its platform drew a furious response from the White House. Amazon executive chairman Jeff Bezos called Trump to defuse the drama, and the company quickly said it had no intention of executing the plan. Advertising, usually dominated by rivals Google and Meta, was a bright spot in the quarter with sales up 19 percent year-on-year.

Amazon posts robust sales and profit beat but outlook clouded

The Seattle-based company also reported strong sales growth for its prominent cloud computing arm Amazon Web Services, it said after the market closed on Thursday. However, uncertainty about President Donald Trump's tariffs and consumer spending clouded Amazon's outlook. Trump's trade policies -- including 145% tariffs on China -- have challenged businesses and threaten to raise prices. However, big companies like Amazon are expected to navigate the climate better than small retailers. Amazon, along with many large retailers and suppliers, have tried to beat the clock by bringing in foreign goods before Trump's tariffs took effect. And Amazon's president and CEO Andy Jassy told analysts during its earnings call that many of its third party sellers did the same. And because of that move, a fair amount of third-party sellers haven't changed their pricing yet, he said. Jassy vowed that Amazon would do everything it could to keep prices low, and while he acknowledged challenges ahead, he touted Amazon's model of vast selection that would help it navigate this new climate. "When there are uncertain environments, customers tend to choose the provider they trust most," Jassy told analysts. "Given our really broad selection, low pricing, and speedy delivery, we have emerged from these uncertain eras with more relative market segment share than we started, and better set up for the future." On Friday, Trump is also ending a trade exemption that allowed low-value shipments from China to bypass duties, an exemption that had given an advantage to China-founded e-commerce firms, such as Shein and Temu. The new tariffs could benefit Amazon by increasing costs for its competitors. But it would also affect Chinese sellers who connect with American consumers on the company's shopping platform. Furthermore, it could increase prices on a recently-launched online storefront that Amazon set up to ship low-cost products directly from China. The storefront, called Amazon Haul, was Amazon's answer to Shein and Temu. Amazon said that it earned $17.13 billion, or $1.59 per share, for the quarter ended March 31. That's up from $10.43 billion, or 98 cents a share, in the year-ago period. Revenue rose 9% to $155.7 billion, up from $143.3 billion from the year-ago period. Sales for Amazon Web services rose 17% to $29.3 billion during the fiscal first quarter. Amazon is one of the biggest players in the race around generative artificial intelligence. Like other tech companies, it has increased investments in the technology and is spending billions to expand data centers that bolster AI and cloud computing. The company is also investing in its own computer chips and those developed by Nvidia. It has also expanded its own AI models and integrated generative AI into other parts of its business. In the first quarter, Amazon reported spending $25.02 billion on property and equipment, higher than the $14.92 billion spent in same period in 2024. Amazon this week announced a $4 billion investment through 2026 to expand its rural delivery network to bring faster delivery to customers in less densely populated areas across the US. The company said it expects sales in the second quarter to be anywhere from $159 billion to $164 billion. Analysts projected $161.2 billion, according to FactSet. It also projects operating income to be in the range of $13 billion to $17.5 billion for the fiscal second quarter. Analysts expect $17.6 billion, according to FactSet. Amazon shares fell more than 2% in after-hours trading on Thursday.

Amazon posts solid first quarter earnings growth, but outlook is tempered by tariff uncertainty

NEW YORK (AP) -- Amazon posted higher first-quarter profit and sales, underscoring the online behemoth's hold on shoppers looking for low prices in an uncertain economy. The Seattle-based company also reported strong sales growth for its prominent cloud computing arm Amazon Web Services, it said after the market closed Thursday. However, uncertainty about President Donald Trump's tariffs clouded Amazon's outlook. Trump's erratic trade policies -- including 145% tariffs on China -- have paralyzed businesses and threaten to raise prices and hurt consumers. However, big companies like Amazon are expected to navigate the climate better than small retailers. Experts say that retailers are heading into key shipping periods, starting with the back-to-school season, and many have paused some shipments, creating worries of shortages later this summer. Amazon said that it earned $17.13 billion, or $1.59 per share, for the quarter ended March 31. That's up from $10.43 billion, or 98 cents a share, in the year-ago period. Revenue rose 9% to $155.7 billion, up from $143.3 billion from the year-ago period. Sales for Amazon Web services rose 17% to $29.3 billion during the fiscal first quarter. Amazon is one of the biggest players in the race around generative artificial intelligence. Like other tech companies, it has increased investments in the technology and is spending billions to expand data centers that support AI and cloud computing. The company is also investing in its own computer chips and those developed by Nvidia. It has also expanded its own AI models and integrated generative AI into other parts of its business. In the first quarter, Amazon reported spending $25.02 billion on property and equipment, higher than the $14.92 billion spent in same period in 2024. Amazon shares fell nearly 5% in after-hours trading on Thursday.