Amazon earnings preview: Cloud growth, AI demand, and tariff risks in focus

Amazon is set to report first-quarter earnings after the market closes on Thursday, May 1, offering a fresh look at how it’s navigating the uncertain economy — including the impact of tariffs — and the latest trends in demand for AI and its core cloud technologies.

Analysts predict that Amazon will bring in about $155.1 billion in revenue, up 8% from this time last year. Wall Street expects profits of $1.36 per share, according to estimates from Yahoo Finance. Those numbers would put Amazon at the high end of its own previous forecast.

Investors will be watching the health of Amazon’s cloud business, trends in AI spending and demand, and whether new tariffs on China-made goods are starting to impact sales.

The results follow a public spat between Amazon and the White House over a report that the company planned to display tariff-related costs to consumers, which Amazon disputed.

Cloud and AI: Amazon Web Services, the company’s cloud division, remains one of its biggest moneymakers. It brought in nearly $29 billion in revenue last quarter, growing 19% from a year earlier. For Q1, analysts expect growth to slow slightly to around 17% to 18%.

Amazon is investing heavily in new data centers and chips to support artificial intelligence services. The company has said it will spend roughly $100 billion in total 2025 capital expenditures, primarily for cloud and AI infrastructure.

Amazon “remains focused on investment through uncertainty,” Morgan Stanley analyst Brian Nowak wrote in an April 13 note to investors, saying he expects Amazon to keep focusing on long-term bets in logistics, robotics, the cloud, and other areas.

CEO Andy Jassy has described demand for AI-related cloud tools as insatiable. Still, analysts say AWS profits may not grow as fast as they have in recent quarters.

E-commerce: Amazon’s core online shopping business grew 10% in North America last quarter. This time around, growth is expected to slow a bit — somewhere around 7% to 8%, according to Bank of America and UBS research estimates.

There’s growing concern about the impact of tariffs on goods imported from China. Amazon has reportedly stocked up on inventory and cancelled some orders, but those changes take time. The bigger impact may show up later this year, depending on how the situation shakes out.

Some analysts think the tariff news may have actually helped Q1 sales a little.

“In certain categories, we do see a little bit of people buying ahead,” Jassy said in an April 10 CNBC interview, referring to consumer behavior amid tariff concerns. 

Advertising: Amazon reported about 24% growth in ad revenue for the fourth quarter, to $14.6 billion. BofA expects 18% growth in the first quarter, down about 2 points from the prior year. 

But there’s some risk ahead: if small and mid-sized sellers are squeezed by tariffs, they might pull back on ad spending.

Amazon is also expanding video ads through Prime Video, and plans to host an ad industry event on May 12, which could give more clues about demand.

Check back with GeekWire on Thursday for Amazon’s results.