Amazon (AMZN-2.87%) reported first-quarter earnings after the bell Thursday, blowing past expectations.
Net sales rose 9% to $155.7 billion, while net income reached $17.1 billion, or $1.59 per share, easily topping Wall Street’s forecast of $1.37 EPS.
North American sales came in at $92.9 billion and international sales hit $33.5 billion, climbing 8% and 5% over last year, respectively.
AWS, Amazon’s profit engine, posted $29.3 billion in revenue, with segment operating income climbing to $11.5 billion — suggesting that demand for cloud and AI workloads remains strong.
Amazon’s ad sales also surpassed estimates, rising 19% year-over-year to $13.9 billion, beyond the $13.7 billion analysts expected.
However, Amazon shares promptly sank 4% in after-hours trading, offering little relief after a tough start to 2025. The stock is down roughly 13.5% year to date, underperforming even the Nasdaq, as investors weighed macro pressures, regulatory scrutiny, and a potential hit from Trump’s proposed tariffs.
A key metric this quarter was Amazon’s operating margin, especially in North America. The company posted a record 4.4% last quarter, powered by logistics efficiencies and greater Prime engagement. This quarter’s 11.8% result suggests that momentum is holding — even as input costs and macro uncertainty remain high.
Amazon Web Services continues to drive the lion’s share of the company’s profits. Going into Thursday, Wedbush analysts expected another strong showing, noting that AI-related demand could help push AWS results above “whisper expectations.” Amazon is proving it can, posting AWS segment sales of $29.3 billion vs. last quarter’s $28.8 billion, and AWS segment operating income of $11.5 billion vs. last quarter’s $7.2 billion.
On a year-over-year basis, that’s a growth rate of 17%, a startup-like number to underline CEO Andy Jassy’s recent comments that Amazon is the world’s largest startup, or at least aims to function like it. Still, whether the result shines as bright following Microsoft’s (MSFT-0.92%) banger of a quarter — with cloud growth almost double Amazon’s — is an open question.
Amazon’s quarter was strong — but side-by-side with Microsoft, it revealed the tale of two cloud strategies. Azure’s 33% year-over-year growth outpaced AWS’s 17% gain, and Microsoft emphasized that nearly half of Azure’s growth came from AI workloads — a level of transparency Amazon hasn’t yet matched, but may on the earnings call at 5 p.m. ET. Microsoft also cited a 30% performance boost across its data centers and a more than 50% drop in cost-per-token, key efficiency metrics tied to AI infrastructure ROI.
While it’s fair — and increasingly standard — to compare the two cloud giants, there are nuances. AWS remains the market leader by revenue, but Azure has been growing faster, particularly with enterprise customers who already use Microsoft tools. Microsoft’s bundling of services like Office 365 can inflate Azure revenue, while AWS’s accounting tends to reflect more direct cloud infrastructure and services. But in terms of investor enthusiasm, Microsoft’s clarity and momentum around AI stood out this quarter. Whether Amazon can narrow that narrative gap may depend on what execs share during the call.
Amazon’s sheer size means it’s broadly exposed to shifting trade winds. This week, the company made headlines for considering to show tariff-related costs at checkout on its Haul shopping site — a sign of just how sensitive global shipping and sourcing dynamics have become.
Investors will be listening closely to the 5 p.m. ET earnings call for updates on forward guidance and any commentary on trade risk.
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