Despite strong Q1 results, Amazon’s subdued outlook for the next quarter has raised market concerns. This could put pressure on AMZN share price, which may drop to 144 USD.
Amazon.com, Inc. (NASDAQ: AMZN)’s Q1 2025 financial report showed strong revenue growth and robust results in the AWS and advertising segments. However, the company incurred a 1 billion USD write-off due to product returns and inventory adjustments related to tariffs. AWS revenue rose by 17% year-on-year but recorded the slowest pace in the past five quarters, slightly lagging behind Microsoft (NASDAQ: MSFT) and Google (NASDAQ: GOOG). Despite exceeding revenue expectations, Amazon issued a cautious forecast for Q2 2025, with expected operating income falling short of Wall Street’s estimates.
Amazon shares fell following the report, reflecting concerns about slowing cloud growth, margin compression, and external factors such as tariffs and currency risks. The market is weighing Amazon’s long-term investments in AI and infrastructure against current profitability risks.
This article discusses Amazon.com, Inc., offering a fundamental analysis of Amazon’s (AMZN) report and a technical analysis of Amazon.com shares. These analyses form the basis for the AMZN stock price forecast for 2025. The article also examines the company’s business model, assesses the risks of investing in Amazon.com, and presents expert forecasts for Amazon’s shares.
About Amazon.com, Inc.
Amazon.com, Inc. is one of the world’s largest technology companies. It was established by Jeffrey Bezos in 1994 in Seattle, US. Initially, the company specialised in selling books online but has since evolved into a multi-industry platform. Today, Amazon is engaged in e-commerce, provides cloud computing services through Amazon Web Services (AWS), manufactures electronics (such as Kindle and Echo), and develops media services, including streaming and content production.
The company held its IPO on 15 May 1997, listing its shares on the NASDAQ under the ticker AMZN.
Image of the company name Amazon.com, Inc.
Amazon.com, Inc.’s main financial flows
Amazon’s revenue is based on several key segments, reflecting the company’s varied, multisectoral operations:
- Online retail: selling goods directly on behalf of the company, including books, electronics, clothing, household appliances, and more
- Marketplace: providing the company’s platform to third-party sellers to sell their goods through its website. Amazon generates revenue from sales commissions, paid storage and delivery services and other seller support services
- Cloud computing (Amazon Web Services): this is the world’s largest cloud service provider. The service includes server rentals, data storage, big data analytics tools, and other cloud solutions. This segment generates Amazon’s highest profits compared to all other business areas
- Subscriptions (Amazon Prime and other services): providing access to streaming platforms (video and music), cloud storage, and other products. This category also includes revenue from subscriptions to other services, such as Kindle Unlimited and Amazon Music Unlimited
- Advertising: actively developing its digital advertising business, including income from placing advertisements on the platform, such as ads in search results. Revenue from these and other advertising services has increased significantly in recent years
- Offline retail stores: physical sales outlets, including Amazon Go and Amazon Fresh stores, Whole Foods Market supermarkets, and speciality book and electronics stores
- Electronics and technology sales: producing and selling its own products, including the popular Kindle eBooks, Echo smart speakers with Alexa voice assistant, Fire TV streaming boxes, and other technology products
- Other areas: less significant revenue streams, such as providing logistics services to third parties, acting as an intermediary in book publishing (Amazon Publishing), developing video games (Amazon Game Studios), income from the Twitch streaming platform, and other innovative projects
These diverse revenue streams enable Amazon.com, Inc. to remain resilient to changing market conditions and expand its influence across various sectors.
Amazon.com, Inc. Q3 2024 report
Amazon reported it ended Q3 2024 with gains across key financial indicators. Below is the main report data:
- Revenue: 158.9 billion USD (+11%)
- Net income: 15.3 billion USD (+54%)
- Earnings per share: 1.43 USD (+52%)
- Operating profit: 17.5 billion USD (+55%)
Revenue by segment:
- North America: 95.5 billion USD (+8%)
- Operating income (loss): 5.7 billion USD (+30%)
- International: 35.9 billion USD (+11%)
- Operating income (loss): 1.3 billion USD – in Q3 2023, the company posted a loss of 95 million USD
- Amazon Web Services (AWS): 27.4 billion USD (+19%)
- Operating income (loss): 10.4 billion USD (+49%)
All key financial metrics showed growth in Q3 2024. The international segment saw increased sales, but costs also rose concurrently. As a result, it remained the most vulnerable and could be the first to incur losses in the event of even minor economic disruptions.
The North American segment contributed the most to the company’s total revenue but also incurred the highest costs.
AWS remained Amazon’s most promising and profitable division, demonstrating sustained growth and strong profitability.
For Q4 2024, Amazon forecasts revenue between 181.0 and 188.0 billion USD, representing a 7-11% increase compared to the corresponding period in 2023. Operating profit is expected to range between 16.0 and 20.0 billion USD, up from 13.0 billion USD a year earlier.
Amazon.com, Inc. Q4 2024 report
Amazon reported ending Q4 2024 with growth in key financial metrics once again. The key figures from the report are as follows:
- Revenue: 187.8 billion USD (+10%)
- Net income: 20.0 billion USD (+88%)
- Earnings per share: 1.86 USD (+86%)
- Operating profit: 21.2 billion USD (+60%)
Revenue by segment:
- North America: 115.5 billion USD (+9%)
- Operating income (loss): 9.6 billion USD (+43%)
- International: 43.4 billion USD (+8%)
- Operating income (loss): 1.3 billion USD - In Q4 2023, the company posted a loss of 419 million USD
- Amazon Web Services (AWS): 28.8 billion USD (+19%)
- Operating income (loss): 10.6 billion USD (+48%)
In its commentary on the Q4 2024 report, Amazon’s management provided forecasts for 2025, focusing on revenue, operating profit, and capital expenditures. For Q1 2025, revenue is expected to range between 151.0 and 155.5 billion USD, below the consensus forecast of 158.6 billion USD. Operating profit for this period is projected at 16.0 billion USD, which also falls short of analysts’ expectations.
The company also announced a significant increase in capital expenditures, which could reach 105.0 billion USD in 2025. This marks a notable rise compared to 77.0 billion USD in 2024 and more than double the 48.0 billion USD spent in 2023. These investments will primarily focus on infrastructure, including the expansion of the AWS cloud business and the development of AI solutions.
AWS is anticipated to remain Amazon’s key growth driver in 2025 due to a trend of companies migrating to cloud infrastructure, the end of the cost optimisation phase, and increasing demand for AI solutions. The company has described artificial intelligence as a once-in-a-lifetime opportunity.
The data indicates that Amazon is heavily investing in developing AWS and AI, with substantial investment in infrastructure. However, the weaker-than-expected revenue and operating income forecast for Q1 2025 has disappointed investors, negatively impacting the share price.
Amazon.com, Inc. Q1 2025 report
On 1 May, Amazon.com released its report for Q1 2025, ending 31 March. Below are the key indicators compared to the same period in 2024:
- Revenue: 155.66 billion USD (+9%)
- Net income: 17.12 billion USD (+64%)
- Earnings per share: 1.59 USD (+62%)
- Operating profit: 18.40 billion USD (+22%)
Revenue by segment:
- North America: 92.89 billion USD (+8%)
- Operating income: 5.84 billion USD (+17%)
- International: 33.51 billion USD (+5%)
- Operating income: 1.01 billion USD (+12%)
- Amazon Web Services (AWS): 29.26 billion USD (+17%)
- Operating income: 11.54 billion USD (+22%)
Amazon.com, Inc.’s Q1 2025 earnings report demonstrates solid results, which may attract investors seeking companies with sustainable growth and operational efficiency.
Net sales rose 9% year-on-year despite an adverse currency exchange effect of 1.4 billion USD. This growth was driven by an 8% rise in North American sales and a 5% increase internationally, confirming Amazon’s ability to strengthen its global market position amid economic uncertainty.
A key achievement was the 64% profit increase and 22% growth in operating profit, reflecting cost optimisation and improved logistics.
Amazon Web Services (AWS), the company’s key profit driver, recorded a 17% increase in sales, reaching an annualised revenue of 117 billion USD. However, it slightly underperformed expectations due to reduced corporate spending amid concerns about tariffs and a potential recession. By comparison, Microsoft Azure, within the Intelligent Cloud segment, grew by 21%, while Google Cloud recorded an even more impressive 28% increase. While AWS maintained its market share leadership (29% in Q1 2025 compared to Microsoft’s 22% and Google’s 10%), it lagged behind its competitors in growth rates, likely due to a higher comparison base and a temporary slowdown in corporate investment in cloud technologies.
Amazon’s online advertising segment grew by 19%, generating 13.92 billion USD, further solidifying its position as the company’s third-largest revenue stream.
However, not everything was positive. The company recorded a 1 billion USD write-down due to product returns and inventory adjustments linked to tariffs. This included 800 million USD in losses from North American retail and 200 million USD in international markets.
AMZN shares declined following the report, likely due to the slowdown in AWS growth and a conservative Q2 2025 forecast. The company projects operating profit to range between 13.0 and 17.5 billion USD, below the consensus estimate of 17.8 billion USD. This cautious outlook reflects risks associated with tariff policies, particularly the potential 145% tariffs on Chinese goods, which could affect half of Amazon’s product range. However, the forecast appears conservative, which could allow the company to exceed expectations amid steady consumer demand and a recovery in AWS.
While risks remain – including tariff pressure and increased competition in the cloud segment from Microsoft and Google – Amazon’s competitive advantages in logistics, customer loyalty, and innovation remain significant. The current correction in AMZN shares could present a good entry opportunity for investors, considering the long-term growth potential driven by advancements in AI, advertising, and a rebound in AWS momentum.
Expert forecasts for Amazon.com shares for 2025
- Barchart: 46 out of 53 analysts rated Amazon shares as a Strong Buy, 5 as a Moderate Buy, and 2 as Hold. The maximum target price for AMZN shares is 290 USD, and the minimum is 195 USD
- MarketBeat: 44 out of 47 specialists rated the stock as Buy, 3 gave a Hold recommendation. The highest target price is 290 USD, and the lowest is 186 USD
- TipRanks: 49 out of 50 professionals recommended Buy, 1 recommended Hold. The maximum target price is 288 USD, and the minimum is 195 USD
- Stock Analysis: 23 out of 44 experts rated the stock as Strong Buy, 20 as Buy, and 1 as Hold. The highest target price is 290 USD, and the lowest is 195 USD
None of the experts recommend selling AMZN shares.
Expert forecasts for Amazon.com, Inc. shares in 2025
Amazon.com, Inc. stock price forecast for 2025
On the weekly timeframe, Amazon.com shares are trading within an upward channel. In February 2025, AMZN reached the upper boundary of the channel at 240 USD before moving downward. As of May 2025, Amazon shares continue to decline towards the trendline as part of a correction, although a Head and Shoulders pattern is starting to form on the chart. Based on the current performance of Amazon.com stock, the potential price movements for 2025 are as follows:
The primary forecast for AMZN stock suggests movement within the Head and Shoulders pattern. According to this pattern, AMZN shares could rise to the resistance area between 206 and 217 USD. A downward breakout from this zone would signal the resumption of the decline, with the neckline at 165 USD as the nearest target. A break below this line would trigger a further drop in the stock price towards the trendline at 144 USD.
An alternative scenario for the AMZN share forecast suggests a decline from the current level. The downside targets would be the support levels at 165 and 144 USD.
Amazon.com stock analysis and forecast for 2025
Risks of investing in Amazon.com, Inc. stock
Investing in Amazon stock should be weighed against factors that may adversely affect the company’s revenue. The key risks are listed below:
- Slower e-commerce growth: this area is the company’s primary revenue stream, and if growth rates decline (for example, due to market saturation or changes in consumer preferences), it could adversely affect Amazon’s financial position
- Competition: intensifying competition from other major market players, including Shopify Inc. (NYSE: SHOP), Target Corporation (NYSE: TGT), and Walmart Inc. (NYSE: WMT). To maintain its market share, Amazon must make significant efforts to counter international competitors’ platforms, such as products from Alibaba Group Holding Limited (NYSE: BABA)
- Rising inflation: if inflation in the US begins to rise again, Amazon will face higher costs for logistics, product delivery, storage, and wages, which may reduce its operating profit
- Regulatory risks: increased scrutiny from antitrust authorities and the introduction of new regulations (for example, in taxation and data privacy) could significantly impact the business. Companies like Apple Inc. (NASDAQ: AAPL) and Alphabet Inc. (NASDAQ: GOOG) have already experienced regulatory pressure
- Weakening demand for AWS: Amazon’s most profitable segment is the AWS division. If corporate clients reduce their spending on cloud services (e.g., during an economic downturn), it could substantially affect Amazon’s net profit