Amazon earnings updates: Wall Street watching for cloud demand, advertising strength

Amazon will report first-quarter earnings on Thursday after the closing bell.

The impact of President Donald Trump’s tariffs on the company’s e-commerce business will be in focus, as will the prospect of continued growth in Amazon Web Services. Despite the tariff overhang, analysts are still largely bullish on Amazon’s stock over the next 12 months.

The earnings-release time is shortly after 4 p.m. ET, and its conference call with analysts will start around 5 p.m.

Amazon’s stock was down 16% year-to-date through Wednesday’s close, lagging the the S&P 500’s 5% decline.

JPMorgan is bullish on AWS and a shrinking AI gap

AWS logo at re:Invent 2024 

JPMorgan is upbeat heading into the e-commerce giant’s results, pointing out that fundamentally bullish factors set the stage for a strong performance.

Though the bank’s first-quarter expectations fall short of consensus estimates, Amazon is positioned for strength down the road. JPMorgan analysts project $154 billion in net sales and $17.3 billion in operating income.

“We remain bullish as AMZN drives non-Al growth & tightens the GenAl gap, which supports improved AWS trends in 2H,” analysts wrote.

The bank expects AWS growth to pick up in the second half of the year, assuming macro uncertainty and supply disruptions ease.

While tariffs are the key threat in the near term, Amazon has options, JPMorgan said. Up to 40% of products are likely sourced from China, but the firm could pressure suppliers to assume these costs, reroute supply chains, cancel orders, or pass costs on to consumers.

JPMorgan rates Amazon “Overweight,” with a $220 price target for the stock.

Amazon’s consensus first-quarter net sales estimate is $155.16 billion.

First quarter

• Net sales estimate: $155.16 billion
  • Online stores net sales estimate: $56.85 billion
  • Physical Stores net sales estimate: $5.41 billion
  • Third-Party Seller Services net sales estimate: $36.98 billion
  • Subscription Services net sales estimate: $11.65 billion
  • AWS net sales estimate: $29.36 billion
  • North America net sales estimate: $92.63 billion
  • International net sales estimate: $33.07 billion
• Third-party seller services net sales excluding F/X estimate: +6.92%
• Subscription services net sales excluding F/X estimate: +8.86%
• Amazon Web Services net sales excluding F/X estimate: +17.2%
• EPS estimate: $1.36
• Operating income estimate: $17.51 billion
  • Operating margin estimate: 11.2%
  • North America operating margin estimate: +6.65%
  • International operating margin estimate: 2.96%
• Fulfillment expense estimate: $23.78 billion
• Seller unit mix estimate: 61.8%

Second quarter

• Net sales estimate: $161.42 billion
• Operating income estimate: $17.85 billion
• Capital expenditure estimate: $26.93 billion

Full-year 2025

• Capital expenditure estimate: $104.3 billion

Source: Bloomberg