Amazon(US:AMZN) Tianfeng Securities·2025-05-26 11:47Investment Rating - The investment rating for the company is "Buy," with an expected relative return of over 20% within the next six months [10]. Core Insights - The company's overall performance in Q1 2025 met expectations, with net sales of $155.67 billion, a year-on-year increase of 10%. Operating profit reached $18.405 billion, exceeding the upper limit of prior guidance by approximately $400 million and surpassing Bloomberg consensus expectations of $17.51 billion. The EPS was $1.59, exceeding the consensus estimate of $1.36. The company anticipates Q2 net sales between $159 billion and $164 billion, with expected operating profit between $13 billion and $17.5 billion [1]. - Retail business showed robust growth, with North American retail revenue at $92.9 billion (up 8% YoY) and international retail revenue at $33.5 billion (up 5% YoY). The company noted that despite potential tariff impacts, demand has not significantly weakened, aided by proactive procurement and diversified supply chains [1][3]. - AWS revenue for Q1 was $29.3 billion, a 17% YoY increase, slightly below the consensus estimate of $29.36 billion. AWS operating profit was $11.5 billion, with annualized revenue exceeding $117 billion. The AI business generated annual revenue in the billions, reflecting triple-digit growth, indicating strong demand for AI services [2][3]. - The company plans to continue increasing capital expenditures, which were $24.3 billion in Q1 2025, primarily to support growing technology infrastructure needs. Future capital spending will focus on AWS development and enhancing logistics and transportation networks [2][3]. Summary by Sections Performance Overview - Q1 2025 net sales: $155.67 billion, up 10% YoY - Operating profit: $18.405 billion, exceeding guidance and consensus - EPS: $1.59, above consensus estimate [1] Retail Business - North American retail revenue: $92.9 billion, up 8% YoY - International retail revenue: $33.5 billion, up 5% YoY - Demand remains stable despite potential tariff impacts [1][3] AWS and AI Business - AWS Q1 revenue: $29.3 billion, up 17% YoY, slightly below expectations - AWS annualized revenue: over $117 billion - AI business shows strong demand with annual revenue in the billions [2][3] Capital Expenditures - Q1 2025 capital expenditures: $24.3 billion - Future investments will focus on AWS and logistics efficiency [2][3]