Don't Sweat Amazon's Tariff Impact. Here's Why the Stock Remains a No-Brainer Buy.

Core Viewpoint - Amazon reported strong Q1 2025 results, beating earnings estimates and meeting revenue expectations with $155.7 billion in revenue, despite concerns over tariffs [1][3] Tariff Management - CEO Andy Jassy acknowledged significant uncertainty regarding tariffs but noted that demand remains strong and average selling prices have not risen significantly [3][4] - Amazon has engaged in forward buying and diversified production locations to mitigate tariff impacts, which may help the company weather challenging conditions better than competitors [4][5] Future Prospects - Amazon is improving its cost structure through initiatives like increasing same-day delivery sites, enhancing rural delivery networks, and implementing more automation [5] - Advertising revenue grew 19% year-over-year in Q1 to $13.9 billion, indicating strong growth potential in this segment [6] - The launch of Project Kuiper satellites aims to provide global internet service, while the Zoox autonomous ride-hailing business is expanding its testing locations [7] Growth Drivers - Amazon Web Services (AWS) is highlighted as a key growth driver, with Jassy emphasizing that over 85% of global IT spending is still on-premises, suggesting significant future growth potential for cloud services [8][9] - Despite competition, AWS continues to show substantial growth, with a 17% year-over-year increase on a $117 billion revenue run rate [9] Investment Opportunity - Amazon's stock is currently down over 20% from its previous high, presenting attractive buying opportunities for long-term investors [9][10] - The stock trades at a price-to-earnings ratio of 31, the lowest in 16 years, while the company leads in e-commerce, cloud computing, and AI, with expansions into healthcare and robotaxis [10][11]