Amazon reports strong Q1 results with mixed Q2 guidance
The e-commerce and cloud giant just released quarterly results.
Amazon is whipsawing in postmarket trading after reporting strong Q1 results with a mixed Q2 outlook.
The e-commerce giant reported:
Sales of $181.5 billion (estimate: $177.2 billion, guidance for $173.5 billion to 178.5 billion).
Operating income of $23.9 billion (estimate: $20.8 billion, guidance for $16.5 billion to $21.5 billion).
This being the AI era, however, it’s the cloud business — where Amazon holds pole position — that’s in focus.
And there, Amazon Web Services sales of $37.6 billion handily surpassed the consensus call for $36.7 billion.
“AWS is growing 28% (our fastest growth in 15 quarters) on a very large base, our chips business topped a $20 billion revenue run rate (growing triple digits year-over-year), Advertising grew to over $70 billion in TTM [trailing 12 months] revenue, and unit growth in our Stores reached 15% (the highest since the tail end of covid lockdowns),” CEO Andy Jassy said in the press release.
In his 2025 letter to shareholders, released earlier this month, Jassy had shared that AWS’s AI revenue run rate topped $15 billion in Q1, the first hard number he’s provided for its contribution to sales.
“Amazon Web Services’ higher-than-expected revenue growth confirms our view that the cloud provider is well placed to capture rising enterprise AI adoption, especially coding-related workloads,” wrote Bloomberg Intelligence analysts Poonam Goyal and Anurag Rana. “It’s highly likely that management will signal an increase in capital outlays on the conference call, given that OpenAI frontier models are now available on the platform.”
For the current quarter, management said to expect sales ranging between $194 billion and $199 billion with operating income of $20 billion to $24 billion.
The midpoint of the former range is above Wall Street’s call for $189.1 billion, while the latter is below the $22.9 billion projection.
Shares of Amazon were up 26.3% in April heading into this print, top among Magnificent 7 hyperscalers.
While some tech companies like Intel and Seagate Technology Holdings managed to be on a tear going into earnings and extend gains on strong results, megacap tech doesn’t seem to be getting the same follow-through if there’s any blemish in the quarter or their outlooks.
About three months ago, Amazon shared its shockingly high 2026 capital expenditure budget of $200 billion (versus a consensus forecast of $146.1 billion) on the conference call, news that sent shares sharply lower.
During the conference call, we’ll be watching to see whether that budget swells further and if traders take a more optimistic on heavy AI investment in light of signs of strong end user demand.
