AMZN: Consolidation Continues This Week?
Amazing Earnings.
On 01 May 2025, $Amazon.com(AMZN)$ announced its quarterly earnings and the results did not disappoint.
Based on analysts’ estimates polled by LSEG:
Earnings per share (diluted) :
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Was $1.59 vs $1.36 expected vs Q1 2024’s $0.98, that is a +62.24% YoY gain. (see above)
Revenue:
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Came in at $155.67 billion vs $155.04 billion expected vs Q1 2024’s $143.3 billion, that is a +8.63$ YoY gain. (see above)
According to StreetAccount, US market were interested in other Amazon’s core numbers:
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Amazon Web Services: was up to $29.3 billion vs $29.42 billion expected vs Q1 2024’s $25.04 billion, that is a +17.01% YoY gain. (see below)
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The slight miss comes after $Microsoft(MSFT)$ posted stronger-than-expected Azure cloud results on Wed, 30 Apr 2025.
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Advertising: $13.92 billion vs $13.74 billion expected vs Q1 2024’s $11.824, that is a +17.73% YoY gain. (see above)
Current Q Guidance.
Below are the “forecast” numbers for current quarter:
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Revenue: will be in the $159 - $164 billion range, representing growth rate between +7.0% to +11.0%. This is below Wall Street’s expectation of $160.9 billion.
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Operating income: will be in the $13 - $17.5 billion range, again below the $17.64 billion expected.
Importantly, Amazon highlighted that tariffs & trade policies are among several factors why its forecast for Q2 2025 could change under circumstances.
Unlike $Apple(AAPL)$ CEO Tim Cook, who bravely ‘declared” that tariffs might cause a $900 million loss, Amazon did not give a specific number.
Where’s Headwinds Coming From?
(1) Clash of the Titans.
Trump caught wind of AMZN’s website new feature before it could be launched successfully.
What was it ? Amazon considered showing a new data field on its B2C portal, telling shoppers how much of a product’s price comes from Trump’s tariffs.
The White House reacted violently, calling AMZN’s intention a “hostile & political act”.
The man himself personally called founder, Jeff Bezos to complain and it was swiftly dropped with AMZN categorically saying that AMZN’s low-cost Haul division briefly considered showing import charges for certain products.
However, the concept was never approved and will not happen.
(2) Founder sells.
Jeff Bezos, has filed a plan with the SEC to sell up to 25 million AMZN shares, valued at about $4.75–$5 billion, under a 10b5-1 trading plan cast in stone on 04 Mar 2025. (see below)
After the mandatory cooling period, the sales take place ‘anytime’ until 29 May 2026, depending on market conditions.
At times of tariffs uncertainty, the action to offload some shares might not sit well with investors; not forgetting (a) a weakening US economy and (b) threat of creeping inflation is real.
(3) Weakening Economy.
Slower consumer spending, possibly due to economic uncertainty and anticipation of tariffs, is going to affect AMZN’s core retail business.
Some analysts believe that shoppers may have already accelerated purchases in March & April to avoid higher prices, that could soften demand in the coming weeks and months.
The preliminary readings for US’s Q1 2025 GDP slipped to -0.3% is sign that US economy is weakening. (see above)
Price Movement.
AMZN stock price is down -15.38% YTD in 2025. (see below)
Prior to earnings, AMZN gained +3% in regular Thu, 01 May 2025 trading.
Comparatively speaking, AMZN year to date loss is more severe than S&P 500’s -4.7% loss.
AMZN has slumped since its Q4 2024 earnings, released on 06 Feb 2025. (see above)
The December-ended quarter results beat earnings estimates but included a lower-than-expected sales forecast for Q1 2025.
Tariff concerns in April 2025 pushed the stock lower in recent weeks, though AMZN has recovered to near its pre-April levels since.
Having said that, US pre-market indicators are looking a tad “red” as at Singapore time 9pm on a Tue, 06 May 2025 afternoon. So…..
With the latest info on AMZN, will Tiger investors be able to decide if AMZN is a keeper for the longer term ?
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Do you think AMZN will further pullback this week ?
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Do you think AMZN’s investment in other companies, will add to its numbers when they take off. eg. $SoundHound AI Inc(SOUN)$, $Rivian Automotive, Inc.(RIVN)$
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