Here’s what Wall Street is saying about Amazon ahead of earnings

TipRanks

Fri, May 2, 2025, 9:40 AM 5 min read

EXPECTATIONS: During the company’s last earnings call, Amazon said it saw Q1 revenue $151.0B-$155.5B, and Q1 net sales between $151.0B and $155.5B, or to grow between 5% and 9% compared with the first quarter 2024. “This guidance anticipates an unusually large, unfavorable impact of approximately $2.1B, or 150 basis points, from foreign exchange rates. Also, as a reminder, in the first quarter of 2024 the impact from Leap Year added approximately $1.5 billion in net sales,” the company stated. The company also said that operating income was expected to be between $14.0B and $18.0B, compared with $15.3 Bin first quarter 2024. “This guidance assumes, among other things, that no additional business acquisitions, restructurings, or legal settlements are concluded,” Amazon added.

Current consensus EPS and revenue forecasts for Amazon’s first quarter stand at $1.37 and $155.13B, respectively, according to data from Yahoo Finance. The consensus EPS and revenue forecasts for Amazon’s full year 2025 stand at $6.21 and $694.41B, respectively.

CONFIDENT DESPITE UNCERTAINTY: In a research note ahead of earnings, BofA said that for Q1, it projects sales/EBIT of $155.5B/$17.8B. The firm thinks the consumer held up relatively well in Q1 despite tariff headlines. For AWS, BofA believes VA Street estimate for 17.4% year-over-year growth is achievable, with CEO Jassy indicating intra quarter that AI demand remains “insatiable.” The firm recently lowered Q2 estimates to reflect macro uncertainty, partially offset by FX tailwinds. For the outlook, BofA expects Q2 sales guide of $154B-$160B, and for operating income, it expects $12.0B-$17.0B, below Street at $17.5B, as lower-end reflects tariff uncertainty and usual management. The firm acknowledges Q2 and second half of the year revenue uncertainty, but remains confident on Amazon’s ability to take share in e-commerce, improve retail margins via headcount cuts, and benefit from Cloud AI demand.

EARNINGS PRESSURES: Last week, Raymond James downgraded Amazon.com to Outperform from Strong Buy with a price target of $195, down from $275. Due to an “uneven” macro environment, tariffs, and “steepening investment intensity,” the Street is underestimating Amazon’s earnings pressures in 2025 and 2026, the firm tells investors in a research note. Raymond downgraded the shares to Outperform pending greater investment and return on investment visibility. Regardless of tariff “stickiness,” further supply chain and logistics diversification likely create a drag for Amazon given its China and rural U.S. demand-side platform exposures, contends the firm. Raymond James remains “constructive” on the company’s artificial intelligence prospects and long-term investments, but with rising earnings risk and limited monetization progress, it finds it more challenging for to stick with its Strong Buy rating. The firm now prefers shares of Meta Platforms (META), Uber (UBER), and MercadoLibre (MELI) to Amazon.

RESULTS COULD BE BETTER THAN FEARED: Benchmark lowered the firm’s price target on Buy-rated Amazon.com to $260 from $270. Amazon “feels like they could be at the confluence of several warring headlines,” including substantial exposure to Chinese sellers, pricing pressure, questions around the sustainability of cloud growth and profitability, and the ongoing offset of incremental e-commerce share gains and improving operational efficiencies throughout the fulfilment ecosystem, says the firm, which made about a 5% operating income reduction to 2025 and 2026 ahead of earnings. However, given that seismic changes do not tend to happen overnight, even in uncertain economic environments, the firm thinks “there is a decent chance results hang in better than feared.”

TARGET CUTS AHEAD OF EARNINGS: Earlier this week, UBS lowered the firm’s price target on Buy-rated Amazon.com to $253 from $272 ahead of the May 1 earnings report. The firm anticipates some level of tariff-driven demand destruction due to price elasticity, and says data from the Department of Commerce suggests goods Americans have purchased have anywhere from 55%-71% imported content across an array of categories, while food and beverage sit lower at 22%. UBS also assumes a deceleration trajectory for Amazon Web Services growth in 2025 below consensus, and that the level of capital intensity across both the e-commerce and AWS remains unchanged.

Oppenheimer also lowered the firm’s price target on Amazon.com to $220 from $260, while keeping an Outperform rating on the shares. Ahead of reporting Q1 results on Thursday, the firm is reducing its Amazon estimates to incorporate uncertainty around tariffs. Investors are highly uncertain as to the tariff impact on e-commerce, but Oppenheimer expects a greater impact on margins vs. revenue, to protect market share and customer experience.

TARIFFS: Amazon is seeking major supplier discounts and setting tough terms to protect margins amid U.S. tariffs, following its playbook from President Donald Trump’s first term, The Financial Times’ Rafe Uddin reported. According to three vendor consultants who negotiate on behalf of multiple brands and suppliers, Amazon is seeking low double-digit price cuts from the sellers of goods ranging from homeware to consumer electronics. Amazon said: “We’re working with our broad, varied range of valued selling partners in our store to support them in adapting to the developing environment while maintaining low prices for customers.”

SENTIMENT: Check out recent Media Buzz Sentiment on Amazon as measured by TipRanks.

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