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.
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’s revenue is based on several key segments, reflecting the company’s varied, multisectoral operations:
These diverse revenue streams enable Amazon.com, Inc. to remain resilient to changing market conditions and expand its influence across various sectors.
Amazon reported it ended Q3 2024 with gains across key financial indicators. Below is the main report data:
Revenue by segment:
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 reported ending Q4 2024 with growth in key financial metrics once again. The key figures from the report are as follows:
Revenue by segment:
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.
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 by segment:
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.
None of the experts recommend selling AMZN shares.
Expert forecasts for Amazon.com, Inc. shares in 2025On 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 2025Investing in Amazon stock should be weighed against factors that may adversely affect the company’s revenue. The key risks are listed below:
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.