​​Amazon Q1 2025 earnings preview: what to expect from the e-commerce giant​

Amazon's expected revenue and earnings for Q1 2025

Wall Street consensus points to Amazon reporting approximately $144 billion in revenue for the first quarter (Q1) of 2025. This suggests modest top-line growth as the company continues to balance expansion across its diverse business segments against a backdrop of economic uncertainty.

On the profitability front, analysts expect earnings per share (EPS) to land around $0.98. This reflects Amazon's continued progress in improving its bottom line through operational efficiency initiatives and margin expansion efforts across its business units.

The expected figures demonstrate Amazon's efforts to maintain growth momentum while simultaneously improving profitability. The company's ability to balance these dual objectives will be closely scrutinised by investors looking for signs of sustainable financial performance.

Market participants will compare these results not only against previous quarters but also against the broader technology sector. With shares up approximately 15% year-to-date, the market appears to have priced in expectations for solid, if not spectacular, results.

Amazon Web Services performance remains under the spotlight

Amazon Web Services (AWS) will once again be a critical focus area for investors and analysts alike. Growth in this segment is expected to remain in the low double digits, reflecting both the maturity of the cloud computing market and ongoing competitive pressures.

Stakeholders will pay particular attention to AWS margins, which have historically been a significant contributor to Amazon's overall profitability. Any compression here could impact sentiment, while expansion would likely be viewed positively as a sign of operational leverage.

The cloud unit faces challenges from both increased competition and enterprise clients continuing to optimise their cloud spending. Microsoft's Azure and Google Cloud have been aggressive in their pursuit of market share, potentially putting pressure on AWS's growth trajectory.

Amazon has been investing heavily in artificial intelligence (AI) capabilities within AWS, and any commentary on customer adoption of these services could significantly influence market perception. Positive momentum in AI-related services could offset concerns about the broader slowdown in cloud spending growth.

Advertising revenue growth and e-commerce trends

Amazon's advertising business is projected to deliver another quarter of strong performance, supported by higher engagement levels and improved monetisation on the company's platforms. This high-margin revenue stream has become increasingly important to Amazon's overall financial picture.

The company's ability to leverage its vast customer data and shopping intent information continues to make it an attractive platform for advertisers. Any acceleration in this segment would be viewed very positively, particularly as digital advertising trends have been mixed across the industry.

On the e-commerce front, investors will look for signs of stabilisation or improvement in consumer spending patterns. As Amazon's original core business, the performance of online retail remains a barometer for both company health and broader consumer sentiment.

International expansion of e-commerce operations will also be under scrutiny, with particular focus on emerging markets where Amazon has been investing to establish stronger footholds. Growth rates in these regions could provide insight into the company's long-term geographic diversification strategy.

Operating income and margin expansion initiatives

Operating income will be another key focus area as Amazon continues its efforts to streamline logistics and retail operations. Analysts will parse both the absolute figures and management commentary for evidence that efficiency initiatives are bearing fruit.

The company has been working to optimise its fulfilment network after a period of aggressive expansion during the Covid-19 pandemic. Progress in these efforts would be reflected in improved operating margins for the North American and international segments.

Labour costs and productivity metrics will influence the margin outlook, particularly given Amazon's position as one of the largest employers in the United States (US). Any commentary on automation initiatives or workforce optimisation strategies could impact forward expectations.

Investors will also watch for updates on Amazon's physical retail strategy, including Whole Foods and Amazon Fresh stores. The company's ability to derive value from these capital-intensive operations remains an important question for long-term profitability projections.

AI investments and strategic initiatives

Amazon's approach to AI will be a critical narrative throughout the earnings report and subsequent analyst call. The company has been making substantial investments in AI capabilities across its business segments, from AWS services to retail recommendations.

Management commentary on the return on these AI investments will be closely monitored. While the technology offers significant long-term potential, investors are increasingly focused on near-term monetisation paths as AI development costs continue to escalate.

Competition in the AI space has intensified, with cloud rivals Microsoft and Alphabet perceived by some as having early leads in certain areas. Amazon's strategy to differentiate its AI offerings and leverage its unique datasets will be of particular interest.

The integration of AI into Amazon's consumer ecosystem, including Alexa and smart home products, could provide insights into the company's vision for ambient computing and consumer AI applications. Progress here could influence perceptions of Amazon's position in the next wave of computing.

Forward guidance and market expectations

Perhaps most crucial to Amazon's share price reaction will be the company's forward guidance for the second quarter (Q2) and full-year 2025. Analysts will focus especially on projected AWS momentum and management's view on macro-driven e-commerce demand.

The company's outlook on operating margins will be particularly important given the market's focus on profitability. Positive projections here could outweigh modest misses in other areas, while disappointing margin guidance could weigh on shares despite strong current-quarter results.

International expansion plans and anticipated capital expenditure levels will also feature prominently in the guidance. These forward-looking metrics provide insight into management's confidence in growth opportunities and willingness to invest for the long term.

Amazon technical analysis

The stock dropped by a third from its record high in January to the low in early April. While it has recovered some of those losses, the key level for now remains $190. This was support in March and has been resistance so far in April.

A close back above this helps to restore a more neutral view, and from there the late March high at $20.65 is the next target. The price remains below the 200-day simple moving average (SMA), while the 50-day SMA has closed below the 200-day, a potential bearish signal.

For Amazon, as for all other companies, the outlook for company performance and for the stock price will depend on the broader macro outlook, especially with the tariff situation so uncertain.

Aamazon chart

How to trade Amazon's earnings announcement

1. Do your research on Amazon's previous earnings reports and analyst expectations
2. Choose whether you want to trade or invest based on the earnings results
3. Open an account with IG
4. Search for Amazon in our platform or app
5. Place your trade with appropriate risk management.

Trading Amazon's earnings announcement requires thorough preparation. Review previous quarterly reports to understand patterns in how the company reports results and provides guidance, as well as how the market typically responds to various metrics.

Consider your timeframe and risk appetite before deciding on your approach. Short-term traders might look to capitalise on post-earnings volatility through spread betting or contract for difference (CFD) trading, while longer-term investors might view any post-earnings dip as a potential buying opportunity.

Our trading platform offers comprehensive tools to help you analyse Amazon's price action before and after earnings. Technical analysis can help identify key support and resistance levels that might influence how far prices move following the announcement.

Remember that earnings announcements often lead to heightened volatility, making risk management particularly important. Consider position sizing carefully and potentially using guaranteed stops to protect against adverse price movements if the results surprise to the downside.