AMZN "Impressive" Earnings: AWS Continues Momentum, Trims Tariff Fears

Core Insights - Amazon's stock price has rebounded significantly, increasing by almost 12% following the earnings report, indicating positive market sentiment [1][4] - AWS has achieved over 20% growth, which is notable given its large sales base, and the retail business is also performing well, particularly during Prime Day [2][22] AWS Performance - AWS's growth rate of over 20% is impressive and reflects the company's ongoing investment in AI and cloud services [2][22] - The company plans to ramp up spending, particularly in AI, to maintain its competitive edge [2][7] Retail Business Strategy - Amazon is expanding its relationships with third-party sellers, which is crucial for competing with traditional retailers like Walmart [3] - The company has successfully absorbed rising tariff costs without passing them on to consumers, resulting in an 11% increase in items sold [12] Consumer Behavior and Pricing - Retail prices have surprisingly not increased year-over-year, but there is an expectation that prices will rise as inventory from before the tariffs is sold through [13][14] - Discretionary items are expected to see higher price increases compared to everyday essentials, which are holding steady [15][16] Prime Day and Customer Engagement - The expansion of Prime Day into a longer event has proven beneficial, reinforcing its role as a marketing tool to keep Prime members satisfied [17][18] - Prime members are perceived to be less sensitive to price increases due to the value they find in the service, which is critical for Amazon's business model [19][21]