On Thursday, Amazon unveiled its financial results for the holiday shopping season, revealing revenues and profits that surpassed expectations. However, the company’s stocks experienced a decline during after-hours trading due to lackluster projections for the upcoming quarter.
The Seattle-based e-commerce giant reported that its revenue for the October to December timeframe reached $187.8 billion, reflecting a 10% increase from the same period in the previous year. Profits soared to $20 billion, and earnings per share were recorded at $1.86—significantly above the anticipated $1.49 projected by analysts surveyed by FactSet.
Nonetheless, Amazon forecasted revenue for the current quarter to fall between $151 billion and $155.5 billion, which is below the $158.56 billion that analysts had predicted. The company warned of “an unusually large, unfavorable impact” stemming from fluctuations in foreign exchange rates.
As the leading online shopping platform in the United States, Amazon has consistently benefited from increased consumer spending during the holiday season. In line with its recent strategies, the company initiated promotions in October aimed at attracting early holiday shoppers, offering discounts across various major sales events, including Black Friday and Cyber Monday.
In its report, Amazon disclosed that its online shopping division generated $75.5 billion in revenue, marking a 7% rise compared to the same quarter in 2023. The broader retail industry experienced positive holiday sales figures in November and December, attributed to lower inflation on holiday products, which encouraged shoppers to spend more, according to data from The National Retail Federation. Adobe Analytics additionally recorded that online shopping reached unprecedented sales levels during this period.
Revenue from Amazon Web Services, the company’s major cloud computing segment, increased by 19% during the fourth quarter; however, it fell slightly short of analyst expectations. Amazon is actively competing in the fast-paced tech environment focused on generative artificial intelligence and has intensified its investments in this field, spending billions to enhance data centers that support both AI and cloud computing. Furthermore, the company is investing in various technologies, including its proprietary computer chips and those designed by Nvidia. Amazon has also developed its AI models and has incorporated generative AI technology into several aspects of its operations.
During the fourth quarter, Amazon indicated that its expenditures on property and equipment totaled $27.8 billion—significantly more than the previous year’s figures for the same quarter. In a conversation with analysts, CEO Andy Jassy mentioned that capital expenditures amounted to $26.3 billion, primarily focused on AI and AWS initiatives.
“We believe that nearly every application we encounter will be transformed by AI technology,” Jassy commented. “We are confident that both our business and our stakeholders will see positive results in the medium to long-term from our focus on the capital and business opportunities within AI.”
Jassy also expressed admiration for DeepSeek, a Chinese AI firm whose chatbot has recently gained popularity as the most downloaded app in the United States.
This quarterly report from Amazon arrives as the retail sector responds to a newly introduced 10% tariff on Chinese imports, initiated by President Donald Trump. Tariffs on imports from Canada and Mexico have been suspended temporarily.
Moreover, Trump eliminated a trade exemption allowing low-value shipments from China to evade duties—a loophole that previously favored China-based e-commerce companies like Shein and Temu. Although the new tariffs may provide Amazon with a competitive edge by raising costs for its rivals, they could also negatively impact Chinese sellers connected with American consumers through Amazon’s platform. Additionally, this could increase prices on Amazon Haul, a new online storefront launched to facilitate low-cost products shipped directly from China, designed as a direct competitor to platforms like Shein and Temu.
Analysts from Morgan Stanley noted in a recent report that Amazon’s first-party retail business, where the company sells products sourced from manufacturers, faces the greatest exposure to these tariffs. They estimated that around 25% of the merchandise sold through this segment is sourced from China.
