Amazon (AMZN) Stock: Q125 Beats, But Soft Q2 Outlook Pressures Shares

TLDR

Q1 EPS beat at $1.59 vs. $1.36 expected. Revenue rose 9% to $155.7 billion. AWS revenue hit $29.3 billion, in line with forecasts. Q2 operating income guidance missed estimates. Shares down 13% year to date.

Amazon.com Inc. (NASDAQ: AMZN) reported stronger-than-expected first-quarter results but issued a soft Q2 forecast, weighing on its stock. Shares slipped less than 1% to $190.85 in Friday morning trade, trimming earlier losses after falling nearly 4% post-earnings.

Amazon (AMZN) 

For Q1 2025, Amazon posted earnings per share (EPS) of $1.59, beating Wall Street’s $1.36 estimate. Revenue rose 9% year over year to $155.7 billion, topping the $155.1 billion forecast. The company’s operating income hit $18.4 billion, well above the $17.5 billion expected by analysts.

Amazon Web Services (AWS) revenue grew to $29.3 billion, matching projections and confirming steady demand for its cloud services. However, revenue from third-party seller services increased only 6% to $36.5 billion, below consensus estimates. Advertising revenue, a key profit driver, grew 18% to $13.9 billion, in line with expectations.

Cautious Q2 Outlook

Despite solid Q1 numbers, Amazon’s guidance for the current quarter disappointed investors. The company projected operating income between $13 billion and $17.5 billion, falling short of the $17.8 billion analysts were looking for. Sales are expected between $159 billion and $164 billion, which brackets the $161.4 billion consensus.

CEO Andy Jassy flagged external risks on the call, warning that tariffs, trade policies, and recession fears could materially impact results. “We haven’t seen attenuation of demand yet, but there’s some heightened buying in certain categories that may indicate stocking up,” Jassy noted.

Amazon braces itself for tougher business climate amid Trump trade war https://t.co/Ry2IQCPmxb

— The Straits Times (@straits_times) May 2, 2025

Amazon is also facing pressure from potential pullbacks by Chinese sellers, which could hit both its logistics network and advertising sales. Signs of slowing momentum are already showing, with third-party marketplace revenue growth decelerating compared to prior quarters.

Shares Under Pressure

Amazon stock has dropped about 13% year to date as investors weigh tariff concerns and softer consumer spending. The shares, currently trading at $190.85, are below their 1-year target estimate of $242.43, suggesting potential upside if macro risks ease.

The White House also criticized Amazon recently over reports that it may display tariff costs directly to shoppers. The company said it is only considering this for its Haul platform, which sells low-cost items from Chinese vendors.

Looking Ahead

Amazon’s Q2 earnings date is set between July 30 and August 4, 2025. While AWS and advertising continue to support growth, rising geopolitical and trade tensions pose near-term risks. The company’s performance in the coming months will hinge on its ability to manage supply chain pressures and stabilize third-party seller momentum.

 

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