Amazon Exceeds Q2 Expectations but Faces Investor Concerns

Amazon's Q2 earnings beat expectations with EPS of $1.68 and revenue of $167.7 billion, surpassing consensus estimates. Despite this, the stock reaction was tepid due to lower-than-expected Q3 operating income. Analysts have mixed reactions, with RBC Capital and Stifel maintaining positive ratings, but expressing concerns over Amazon Web Services' revenue growth.

Amazon.com, Inc. (NASDAQ: AMZN) reported its second-quarter results for 2025, with net sales increasing 13% to $167.7 billion, compared to $148.0 billion in the same period last year. This growth was driven by a 12% increase in sales, excluding the $1.5 billion favorable impact from foreign exchange rates. The company's operating income surged to $19.2 billion, a 30% increase year-over-year, and net income rose to $18.2 billion, or $1.68 per diluted share, up from $13.5 billion and $1.26 per diluted share, respectively, in the second quarter of 2024 [1].

The North America segment saw sales increase by 11% to $100.1 billion, while international sales grew by 16%, or 11% excluding foreign exchange rates, to $36.8 billion. AWS segment sales rose by 17.5% to $30.9 billion. Operating income for AWS also increased to $10.2 billion, up from $9.3 billion in the second quarter of 2024.

Despite the strong performance, the stock reaction was tepid due to lower-than-expected Q3 operating income guidance. Analysts had mixed reactions. RBC Capital and Stifel maintained positive ratings but expressed concerns over AWS's revenue growth. RBC Capital noted that while AWS continues to grow, the pace of growth has slowed, which could impact Amazon's overall revenue growth in the coming quarters. Stifel echoed similar sentiments, pointing out that while AWS's growth remains robust, it is not as strong as some had anticipated [1].

The company also announced several strategic initiatives and expansions, including the launch of new AI tools, the expansion of Prime Day, and the integration with Roku. Additionally, Amazon announced significant investments in cloud infrastructure and AI innovation in North Carolina, Pennsylvania, and Australia. The company also highlighted its commitment to sustainability, with plans to expand water recycling to 120+ AWS U.S. data centers by 2030 [1].

Amazon's forward-looking statements reflect expectations as of July 31, 2025, and are subject to substantial uncertainty. The company expects net sales for the third quarter 2025 to be between $174.0 billion and $179.5 billion, representing a growth of between 10% and 13% compared to the third quarter of 2024. Operating income is expected to be between $15.5 billion and $20.5 billion for the same period [1].

References:
[1] https://ir.aboutamazon.com/news-release/news-release-details/2025/Amazon-com-Announces-Second-Quarter-Results/