AMZN Stock Surges: What Amazon’s Surprise Earnings Beat Means for Investors

Amazon.com Inc. (NASDAQ: AMZN) shares are back in the spotlight after the e-commerce and cloud giant crushed Wall Street’s first-quarter expectations yet offered a softer-than-hoped outlook that rattled some investors. Earnings recap • Net sales rose 9 % year over year to $155.7 billion, beating the consensus estimate of $154.8 billion. • Earnings per share surged to $1.59 versus $0.98 a year ago, handily topping forecasts for roughly $1.36. • Operating income more than doubled to $15.3 billion, driven by continued margin expansion in North America and AWS. Guidance and market reaction Management guided Q2 revenue to a range of $159 billion–$164 billion, in line with analyst models, but projected operating income of $13 billion–$17.5 billion, shy of the $17.6 billion consensus midpoint. The stock slipped about 3 % in after-hours trading and is down roughly 13 % year-to-date as tariff and macro concerns swirl. Key growth drivers to watch • AWS momentum: Cloud revenue climbed 13 % to $26.7 billion and operating margin expanded for a third straight quarter, signaling early payoff from cost-optimization programs. • Ads engine: Advertising services jumped 24 % to $13.5 billion, giving Amazon a high-margin counterweight to slower retail growth. • International rebound: Overseas revenue advanced 5 % to $33.5 billion, eking out its first positive operating margin since 2022. Why AMZN stock could re-rate higher 1. AI upside: New Bedrock features and custom Trainium-powered clusters position AWS to capture generative-AI workloads, a theme that has already lifted rivals’ multiples. 2. Logistics moat: The regionalized U.S. fulfillment network cut average delivery times to an all-time low, boosting Prime retention and third-party seller stickiness. 3. Valuation reset: At ~38× forward EPS—below its five-year average near 55×—shares offer leveraged exposure to a still-fast-growing $650 billion revenue base. Risks to monitor • Tariff uncertainty: Proposed 50 % EU duties on U.S. imports could dent discretionary demand and raise input costs. • Consumer softness: Elevated credit-card balances point to potential pullbacks in big-ticket spending. • Antitrust overhang: The FTC’s ongoing marketplace probe could force changes to fee structures or Prime bundling. Bottom line AMZN stock remains a battleground, but the company’s blend of resilient cloud, fast-growing ads, and operational efficiency gives bulls plenty of ammunition. Traders eyeing the next catalyst should mark Amazon’s annual shareholder meeting in June and Prime Day details expected in early July.