Amazon reported strong first-quarter results, with both profit and sales exceeding analysts’ expectations, reflecting continued demand from consumers seeking affordability and variety in a volatile economic climate. The company also highlighted robust growth in its cloud computing division, Amazon Web Services (AWS).
Despite the upbeat earnings, Amazon signaled caution about the months ahead, citing uncertainty tied to consumer spending trends and the impact of President Donald Trump’s trade policies.
Trump’s 145% tariffs on Chinese imports have introduced challenges for many businesses, potentially raising costs. Still, major players like Amazon are seen as better positioned to absorb such disruptions than smaller retailers.
Amazon, along with many other companies, took preemptive steps to avoid the full brunt of the tariffs by importing goods ahead of time. “Many of its third-party sellers did the same,” said President and CEO Andy Jassy during the company’s earnings call. “And because of that move, a fair amount of third-party sellers haven’t changed their pricing yet,” he added.
Jassy emphasized that the company remains focused on keeping prices down. “When there are uncertain environments, customers tend to choose the provider they trust most,” he told analysts. “Given our really broad selection, low pricing, and speedy delivery, we have emerged from these uncertain eras with more relative market segment share than we started, and better set up for the future.”
In a move that could reshape the competitive landscape, Trump is set to end a trade exemption on Friday that allowed low-value Chinese shipments to bypass tariffs—a measure that has favored firms like Shein and Temu. While the change could raise prices for Amazon’s rivals, it may also impact Chinese merchants on Amazon’s platform and its new storefront, Amazon Haul, which delivers budget goods directly from China.
For the quarter ending March 31, Amazon posted a net income of $17.13 billion, or $1.59 per share, compared to $10.43 billion, or 98 cents per share, in the same quarter last year. Revenue rose 9% to $155.7 billion, up from $143.3 billion.
AWS delivered a 17% increase in sales, reaching $29.3 billion. As part of its aggressive push into generative AI, Amazon has ramped up investments in its own chips and Nvidia’s hardware, expanded its AI models, and integrated the technology into various parts of its operations.
Capital expenditures also surged, with Amazon spending $25.02 billion on property and equipment in Q1, up from $14.92 billion a year ago. Among its latest investments, Amazon announced a $4 billion commitment through 2026 to expand rural delivery services and improve shipping speed in less populated areas.
Looking ahead, Amazon forecasts Q2 revenue between $159 billion and $164 billion, compared to analyst estimates of $161.2 billion. It expects operating income between $13 billion and $17.5 billion, slightly below analyst expectations of $17.6 billion, according to FactSet.
Despite the solid financial performance, Amazon shares dropped more than 2% in after-hours trading Thursday.
