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Amazon (NASDAQ:AMZN) is scheduled to report its Q2 earnings on July 31. Analysts expect revenue of $162.0 billion to be reported, driven by continued growth in Amazon Web Services and expanding retail and advertising segments. The consensus EPS estimate for the quarter is $1.32. Key themes for the earnings update and conference call with management include AI innovation with AWS’s AI-powered services under scrutiny and efficiency gains in logistics. Investors are also watching for margin trends in AWS, as increased capital spending could affect profitability.
Deutsche Bank analyst Lee Horowitz wrote that while tariff concerns were front and center when Amazon (NASDAQ:AMZN) guided for Q2, a resilient consumer backdrop and tariff-related cost increases that continue to get kicked down the road should support upside to Q2-Q3 numbers. “What has become abundantly clear is that in the absence of Temu and Shein, Amazon share gains have accelerated,” he highlighted. The firm also expects to see AWS revenue accelerate in the second half of the year.
Needham boosted its estimates on Amazon (AMZN) ahead of the earnings report. Analyst Laura Martin also believes the peak tariff woe is in the rear-view mirror and pointed to the record Prime Day results. Crucially, Martin pointed out that GenAI is lowering costs structurally in AMZN’s logistics infrastructure and improving its automation efficiency.
Citi backed its bullish view on Amazon (AMZN). Analyst Ronald Josey and his team expect the e-commerce giant to beat revenue and operating income expectations. “Given continued efficiency gains across the FC network, cost discipline overall, and mix-shift to high-margin ad revenue and AWS, we look for continued margin expansion,” highlighted Josey.
Seeking Alpha analyt Luca Socci
“Amazon’s earnings main focus will neither be retail sales (Prime Day went great) nor AWS growth rate (you can bet it will be satisfying). Investors are starting to form a new narrative around Amazon’s innovation. We could be seeing a new champion in robotics appear before our eyes, as well as a true low-orbit satellite competitor, not to mention its Zoox robotaxis and the development of in-house AI-supportive chips. Amazon will prove once again that its inner motivations is ‘your margin’is my opportunity,’ and this is why it has no fears in competing at the same with Tesla, Microsoft, Google, and NVDIA. In other words, I expect earnings that will help widen our understanding of Amazon’s new promising and rewarding businesses.”
Lucas Ma of Envision Research, Investing Group Leader for Envision Early Retirement
“Amazon’s free cash flow generation has been declining in recent quarters. Unfortunately, I expect the trend to continue in the upcoming Q2 report as the arm race in AI infrastructure intensifies and geopolitical uncertainties remain elevated. This could limit its future capital allocation for growth and heighten its valuation risks (if you subscribe to the discounted Free Cash Flow model).”