Amazon: A Good Quarter but Some Concerns

Core Insights - Amazon reported Q1 2025 revenue of $155.7 billion, a 9% increase year-over-year, exceeding analyst expectations [2][3] - Earnings per share for Q1 2025 were $1.59, a 62% increase compared to the previous year, also beating consensus estimates [2][3] - AWS revenue grew by 17% year-over-year to $29.3 billion but fell short of expectations, while advertising revenue surged by 19% to $13.9 billion, surpassing forecasts [2][4] Financial Performance - Revenue for Q1 2024 was $143.3 billion, while Q1 2025 saw an increase to $155.7 billion, marking a 9% growth [2] - Earnings per share rose from $0.98 in Q1 2024 to $1.59 in Q1 2025, reflecting a 62% increase [2] - AWS revenue increased from $25.0 billion to $29.3 billion, a growth of 17%, but did not meet expectations [2][4] - Advertising revenue grew from $11.8 billion to $13.9 billion, a 19% increase, exceeding expectations [2][4] Business Segments - Online sales revenue grew by 6% year-over-year, a slowdown from the previous year's 7% growth [5] - Third-party seller services revenue growth decreased to 7%, down from 16% a year ago [5] - Amazon plans to invest $4 billion by the end of 2026 to enhance its rural delivery capabilities, which is expected to boost order volume [5] Future Outlook - For Q2 2025, Amazon anticipates revenue between $159 billion and $164 billion, which is lower than investor expectations [6] - The initial market reaction to the earnings report was negative, with Amazon's stock down approximately 2.5% due to the AWS revenue miss and light guidance [7] Regulatory Environment - Ongoing tensions between Amazon and the Trump administration regarding tariff issues are noteworthy, with potential implications for the company's operations [8]