Amazon(US:AMZN) EBSCN·2025-05-02 12:26Investment Rating - The report maintains a "Buy" rating for Amazon (AMZN.O) [4] Core Insights - Amazon's Q1 2025 performance was below expectations, with Q2 revenue guidance also falling short [1] - AWS revenue growth is slowing, but operating profit margins are recovering [2] - The company is accelerating AI infrastructure and product development, with significant advancements in AI capabilities [3] Summary by Sections Financial Performance - Q1 2025 net sales reached $155.67 billion, a year-over-year increase of 8.6%, exceeding consensus estimates by 0.4% [1] - Operating profit for Q1 2025 was $18.405 billion, up 20.2% year-over-year, with an operating margin of 11.8%, reflecting a 1.1 percentage point increase [1] - Q1 2025 net profit was $17.13 billion, a 64.2% increase year-over-year, surpassing consensus estimates by 11.5% [1] AWS Performance - AWS revenue for Q1 2025 was $29.27 billion, a 16.9% year-over-year growth, slightly below consensus estimates by 0.5% [2] - The operating margin for AWS was 39.5%, showing a quarter-over-quarter increase of 2.5 percentage points [2] - Demand for generative AI is strong, but capacity constraints are impacting growth [2] Capital Expenditure and AI Development - Capital expenditures for Q1 2025 were robust at $88 billion, a 78.4% year-over-year increase [2] - Investments are focused on AWS AI infrastructure, fulfillment network expansion, and automation [2] - Amazon's AI business, Amazon Bedrock, is generating annual revenues in the billions, with several new models launched [3] Revenue and Profit Forecasts - Revenue forecasts for 2025-2027 have been revised down to $694.2 billion, $766.8 billion, and $860.2 billion, respectively [4] - Net profit forecasts for the same period have also been adjusted down to $65.7 billion, $79.6 billion, and $96.1 billion [4] - Current price corresponds to a P/E ratio of 31x for 2025, 25x for 2026, and 21x for 2027 [4] Valuation Metrics - Projected revenue growth rates for 2023 to 2027 are 11.83%, 10.99%, 8.82%, 10.45%, and 12.19% respectively [5] - Projected net profit growth rates for the same period are -8.81%, 94.73%, 10.97%, 21.09%, and 20.66% respectively [5]