NEW YORK — Amazon has reported an impressive performance in the first quarter of the year, showcasing a significant rise in profit and sales that surpassed predictions by financial analysts. The results reflect Amazon’s strong appeal to consumers seeking affordability and extensive options, especially during times of economic uncertainty.
The Seattle-headquartered e-commerce titan also saw robust sales growth in its cloud services division, Amazon Web Services. This was made known following the market’s closure on Thursday, highlighting the company’s diverse business strength.
Despite these positive figures, Amazon faces challenges due to unpredictable trade policies, particularly President Donald Trump’s tariffs, which have already imposed a 145% duty on goods from China. Such measures have been destabilizing for many businesses, potentially leading to increased prices and consumer strain. However, larger firms like Amazon are poised to better handle these uncertainties compared to smaller competitors.
Firms across the industry, including Amazon, have strategically imported goods ahead of tariff impositions. CEO Andy Jassy noted that many third-party sellers on Amazon’s platform have similarly acted preemptively, maintaining stable pricing so far. Jassy stressed that Amazon is committed to maintaining low prices, despite upcoming challenges, and he emphasized the advantage provided by Amazon’s vast inventory.
“In times of uncertainty, customers prefer to engage with entities they trust,” Jassy remarked. “Our broad selection, competitive pricing, and prompt delivery enable us to secure more market share during such periods and position us well for the future.”
Additionally, Friday marks the end of a trade exemption, which previously allowed low-cost shipments from China to bypass tariffs. This change could increase costs for Chinese e-commerce companies like Shein and Temu. Consequently, this development might favor Amazon by raising operating costs for its competitors, though it also has potential implications for Chinese sellers on Amazon’s platform. Moreover, it could affect the price dynamics on Amazon’s recently introduced storefront for affordable Chinese products, called Amazon Haul, designed to compete with Shein and Temu.
In the first quarter, Amazon recorded earnings of $17.13 billion, or $1.59 per share, which is a leap from $10.43 billion, or 98 cents per share, a year earlier. Revenue saw a 9% increase to $155.7 billion, climbing from $143.3 billion in the previous year’s period. Amazon Web Services reported a 17% rise in revenue, reaching $29.3 billion.
Amazon is deeply invested in the race to advance generative artificial intelligence (AI). Along with other tech giants, it is channeling substantial resources into developing data centers that enhance AI capabilities and cloud computing. The company’s ventures include investments in both its own semiconductor technology and those created by Nvidia. Enhancements in AI models and the incorporation of generative AI into various business segments are also underway.
During this first quarter, Amazon’s spending on property and equipment rose to $25.02 billion, a significant increase from $14.92 billion in the corresponding period of 2024.
In a bid to improve service delivery, Amazon announced a $4 billion investment plan through 2026 to boost its rural delivery network, aiming to accelerate shipping times for customers residing in less densely populated U.S. regions.
Looking ahead, Amazon has projected its second-quarter sales to range from $159 billion to $164 billion, with analysts expecting $161.2 billion. The company also anticipates its operating income will lie between $13 billion and $17.5 billion, with analyst expectations sitting at approximately $17.6 billion.
Despite this optimistic outlook, Amazon’s shares saw a decline of over 2% in after-hours trading on Thursday.