Amazon exceeded Wall Street’s expectations in the first quarter of 2025 with a 62% year-on-year profit surge, reporting revenue of $155.7 billion and net income of $17.1 billion, or $1.59 per share. This performance marked Amazon’s third consecutive quarterly beat, surpassing analyst expectations of $1.37 per share and $155.1 billion in revenue. However, the company’s cloud division, Amazon Web Services (AWS), reported revenue growth of 17%, slightly below expectations and trailing behind rivals Microsoft Azure and Google Cloud. AWS generated $29.3 billion in revenue during the quarter. The cloud segment remains Amazon’s primary profit driver, and any slowdown is closely watched by investors. Despite the overall strong quarterly performance, AWS’s growth lagging behind competitors contributed to investor concerns. Amazon’s guidance for the second quarter projected revenue between $159 billion and $164 billion, with operating income between $13 billion and $17.5 billion. While the revenue midpoint of $161.5 billion slightly exceeded consensus, the profit forecast disappointed investors. The company’s shares dropped more than 2% after hours, erasing earlier gains. “Amazon’s second quarter guidance suggests a modest revenue beat, but weaker margin expectations show the challenges ahead,” commented Matt Britzman, senior equity analyst at Hargreaves Lansdown. The tech giant also faced political risks as tariff tensions between the Trump administration and corporate America resurfaced during their earnings announcement. Amazon refuted reports that it planned to pass on tariff-related price hikes to customers, with CEO Andy Jassy acknowledging the uncertainty tariffs bring to pricing and supply chain management. Despite these challenges, Amazon’s core advertising business showed strength with a 19% year-on-year growth. As the company navigates a turbulent macroeconomic environment, investors are seeking clarity on Amazon’s cloud trajectory and strategy for managing political and economic headwinds.
