Amazon’s Mixed Earnings Report Sends Share Prices Down

Despite its efforts to sidestep the scrutiny during President Trump’s trade feud, Amazon, the United States’ top online retailer, found itself unable to evade the implications of tariff conflicts.

The e-commerce giant initially found itself in a brief dispute with the White House over an erroneous claim that it would display tariff costs to shoppers.

This skirmish was followed by a more tangible economic blow when Amazon declared slowing expansion within its North American retail operations.

North America, Amazon’s primary market, played a significant role in the company’s first-quarter financial outcomes, exhibiting the slowest overall revenue increase since the pandemic’s peak. The company disclosed Thursday that sales between January and March reached $155.7 billion, marking a 9% rise from the previous year’s corresponding quarter. Profit surged to $17.1 billion, a 64% growth over the same period.

For the current period, concluding in June, Amazon expects revenues between $159 billion and $164 billion, with operating profits possibly dropping to as little as $13 billion. The corporation included “tariff and trade regulations” among the elements that could affect the accuracy of its projections.

The published results exhibited a blend of successes and setbacks when compared to Wall Street’s predictions. Following the earnings report, Amazon’s stock price plunged by over 3% in post-market trading.

Andy Jassy, Amazon’s chief executive, acknowledged the ambiguity surrounding tariffs on an investor call. “Clearly, none of us have a precise understanding of where tariffs will stabilize or when,” he stated. Jassy affirmed that the corporation is “intensely focused” on maintaining competitive pricing through strategies like stockpiling inventory prior to tariff enactments, and assisting vendors on Amazon’s platform in doing likewise.

Investors have been examining how President Trump’s variable tariffs might influence Amazon consumers. There are hypotheses that consumers might have advanced their purchases in March and April, anticipating higher tariffs, thereby bolstering spending amid general apprehension.

Jassy confirmed that Amazon customers have engaged in “enhanced purchasing” of select items, although he did not provide specifics.

• Online sales of products sold directly by Amazon increased by 5% to $57.4 billion.
• Revenues from services provided to third-party sellers on the site climbed by 6% to $36.5 billion.
• Advertising, a segment regarded as a promising and lucrative venture, expanded by 18% to reach $13.9 billion,

Investors maintain a keen interest in Amazon’s cloud computing division, which accounts for the majority of the company’s profits. Jassy, who previously led the cloud business before his promotion to CEO, has been expanding the company’s artificial intelligence services. The cloud operations grew by 17%, reaching $29.3 billion, in the first quarter.

Jassy pointed out that demand for cloud services is outpacing Amazon’s capacity at their data centers, critical facilities housing the technology driving the modern internet and AI. He noted that constraints on capacity should alleviate in the upcoming months. The company has been swiftly developing more infrastructure, with Thursday’s report showing Amazon expended over $24 billion on capital outlays in the first quarter of the year, roughly $2 billion less than the prior quarter. In February, Amazon announced plans to allocate about $100 billion for capital expenditures by 2025.