Amazon slides on light Q2 guidance, despite earnings beat

Amazon beat earnings expectations for Q1, but the tech giant forecast operating profit for the current quarter that undershot Wall Street’s expectations.

Shares fell 3.9% after-hours, as the company forecast Q2 sales of $159 billion to $164 billion (a midpoint of $161.5 billion) and operating income of $13 billion to $17.5 billion. Analysts are calling for sales of $161.21 billion and operating income of $17.62 billion, according to FactSet.

For the first quarter, Amazon blew past analysts’ revenue expectations with $155.7 billion of sales, up 9% year on year. The FactSet analyst consensus was $155.1 billion. Earnings per share came in at $1.59, topping estimates of $1.37.

Net income was $17.1 billion, up 64% year on year. Estimates were $14.58 billion.

Capital expenditures were $25 billion, in line with analyst expectations.

Ad revenue jumped 18% year on year to $13.9 billion.

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Trump’s “impossible trinity” on AI and energy

Everyone loves a good trilemma.

In economics, the most famous of the genre was developed by Fleming and Mundell, which posits that you can only successfully achieve two of the following three objectives: the free flow of capital, a fixed exchange rate, and independent sovereign monetary policy.

George Pollack, senior US policy analyst at Signum Global Advisors, proposed a trilemma of his own to describe the Trump administration’s competing policy aims as a red-hot AI boom devours power and leaves households miffed by rising electricity bills.

He wrote:

“This note flags what we believe to be a simple reality whose salience will continue growing in US politics in coming months: the Trump administration, in its remaining three years will face a trilemma as the nation waits for its energy bet to play out — proving able to achieve two, but not all three, of the following objectives:

-Fulfill AI’s energy-appetite.
-Keep repressing renewable sources of energy.
-Appease American electricity consumers.”

As for evidence that the Trump administration is taking a fossil fuels-first approach while stunting renewables, Pollack pointed to the One Big Beautiful Bill Act, which shrinks access to tax credits for green energy, as well as the end to the federal pause on liquefied natural gas export permits. However, it would be “inaccurate and unfair” to blame President Trump’s policies for surging electricity prices in recent months, he added.

While the government has pursued the expansion of nuclear power as a way to solve this trilemma, the long lead times involved are incongruent with a short-term fix.

Palantir climbs toward a fresh record high ahead of earnings report

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