Amazon's Q1 2025 results exceeded expectations, driven primarily by AWS, which saw a 17% YoY sales growth and 39% operating profit margin. Despite robust earnings, Amazon's stock is undervalued at 26x 2026e profits, presenting a buying opportunity for investors. AWS is crucial for Amazon's profit growth, producing eight times higher operating profit margins than eCommerce, highlighting its future profit potential.
Coming into Amazon's (AMZN -0.20%) first-quarter earnings report, investors were hoping to see the company's retail business holding up in the face of a weakening economy and tariff threats and for the cloud business to deliver solid growth.
Amazon has managed double-digit YoY revenue growth, despite its massive existing size. AWS and advertising are two incredibly impressive bright spots in the company's portfolio, both large and growing businesses. The company needs to show an ability to manage its capital expenditures and a sustainable rate, to resume growing FCF and returns.
A few weeks ago, we described Amazon as an “ever-expanding behemoth” on the Manhattan scene, following its 330,000 square-foot lease signing at 10 Bryant Park. The deal followed its $1 billion purchase of the former Lord & Taylor building and large leases at three other buildings.
The past 20 years were rough for retail stocks. Many brick-and-mortar retailers went bankrupt as the rise of e-commerce platforms, the collapse of traditional malls, shifting consumer trends, and two recessions permanently transformed the market.
With a market capitalization of $2 trillion, Amazon (AMZN -0.20%) is now one of the most valuable companies in the world. Many investors think it's too late to buy in.
AMZN's Q1 2025 revenue and EPS exceeded expectations, driven by strong growth in AWS and advertising services, signaling a robust financial performance. AMZN's forward P/E ratio is at a historic low of 30.76x, making it a compelling buy compared to its historical average and sector peers. Despite potential risks from Trump tariffs, AMZN's economic profitability and growth metrics indicate it remains a strong long-term investment.
Nearly every investor has heard the adage, "Sell in May and go away." The premise is that stock market returns are often lower between May and October than from November to April.
We're at an interesting inflection point in the market. Stocks continue to gyrate (though mostly higher of late) as investors collectively hope for some sort of resolution to the Trump administration's tariff policy and greater clarity on what the direction of play will be for the geopolitical environment moving forward.
Wall Street doesn't like uncertainty, and there is plenty of it right now. Concerns over the impact of tariffs on the economy have sent shares of even the strongest companies well off their highs this year.
Amazon (AMZN -0.20%) reported quarterly financial results that alleviated many concerns about tariffs and loss of revenue.
Amazon has rolled out Alexa+, the new version of its voice assistant, to more than 100,000 users so far, Amazon CEO Andy Jassy said Thursday (May 1) during the company's quarterly earnings call. Alexa+ will be made available to more users in the coming months, Jassy said.