Amazon (AMZN) reported better-than-expected earnings and revenue for the first quarter of 2025, fueled by strength in its cloud computing and advertising divisions. However, the company issued a cautious outlook for the current quarter, citing uncertainty related to tariffs and trade policy, which sent shares down more than 4% in after-hours trading.<\/p>\n\n\n\n
The tech giant posted earnings of $1.59 per share, beating analyst expectations of $1.36. Revenue reached $155.67 billion, also ahead of the $155.04 billion consensus estimate. Net income surged to $17.13 billion, up from $10.43 billion a year ago.<\/p>\n\n\n\n
Amazon\u2019s high-margin advertising business stood out, generating $13.92 billion in revenue\u2014up 19% year over year and above expectations. Meanwhile, Amazon Web Services (AWS), the company\u2019s cloud division, brought in $29.3 billion, just shy of analyst forecasts and reflecting a slower 17% growth rate compared to 18.9% in the previous quarter.<\/p>\n\n\n\n
Despite the strong Q1 showing, Amazon issued softer-than-expected guidance for Q2. The company forecasted operating income between $13 billion and $17.5 billion, while analysts had anticipated $17.8 billion. It also projected revenue between $159 billion and $164 billion, reflecting 7% to 11% growth\u2014slightly under the $160.9 billion Wall Street average.<\/p>\n\n\n\n
In a notable shift, Amazon flagged \u201ctariffs and trade policies\u201d as potential headwinds in its forward-looking commentary, a concern it had not mentioned in the prior quarter. The warning comes as tariffs, particularly those imposed by the Trump administration on Chinese imports, weigh heavily on the retail giant\u2019s supply chain.<\/p>\n\n\n\n
Many of Amazon\u2019s third-party marketplace sellers, who make up over half of the platform\u2019s sales, source products from China. These sellers are facing steeper import costs, with some already raising prices and scaling back ad spending in response to a 145% levy on certain goods.<\/p>\n\n\n\n
While Amazon\u2019s ad business remains a bright spot and overall performance outpaced expectations, the combination of geopolitical uncertainty, slowing cloud momentum, and light guidance has raised investor concerns about the near-term outlook.<\/p>\n\n\n\n
As tariff discussions intensify and trade tensions remain unresolved, Amazon\u2019s exposure through its vast retail ecosystem is likely to stay in focus heading into the second half of 2025.<\/p>\n\n\n\n