Amazon's Earnings are Increasing. What to Anticipate:

The stock of Amazon (AMZN – 2.25%) has indicated that the company intends to report its earnings for the fourth quarter after the market closes on Thursday.

Considering that this event has taken place, there has been a great deal of enthusiasm surrounding the subject.

A variety of factors, including the expansion of the cloud division of the e-commerce giant through Amazon Web Services (AWS), innovations made possible by artificial intelligence, and a “well-managed” holiday season, are expected to contribute to the company’s ability to produce considerable profits, as stated by analysts.

In addition, Bank of America (BAC +0.26%) forecasts that it will generate sales of $187.24 billion during the fourth quarter, which is equivalent to approximately $1.53 per share.

Exactly what the Amazon company is looking forward to.

Wall Street was anticipating revenues of approximately $1.47 per share, which would account for a total of $187.31 billion. These results are significantly more unfavorable than what Wall Street had anticipated.

Analyst Justin Post reports that the retail giant had a successful fourth quarter, with the primary e-commerce sector of Amazon operating at a high level of efficiency. “The retail industry has shown strong performance,” the analyst said, referring to the retail sector.

It is projected that Amazon Web Services (AWS) will experience growth of 19% and 20%, respectively, as a result of the artificial intelligence that the firm employs in order to manage operations, provide entertainment, and provide assistance to customers who shop online. The announcement of this expansion is expected to take place in the near future.

Amazon is expected to generate between $152.25 billion and $158.25 billion in revenue during the first quarter, according to projections made by Bank of America. These estimates are expected to be made public at some point in the near future.

The amount that is now being used is slightly lower than the market projection of $158.7 billion. Despite this, Bank of America continues to advise investors to purchase Amazon shares, with a target price of $255.

The company asserts that this is connected to both its competitive position in the market for artificial intelligence as well as its rapid increase in profitability. As a result of investors waiting for the data to be made public, the price of Amazon shares grew by approximately 5.8% over the course of the preceding month.

There are a number of problems that Amazon faces that extend beyond its financial success.

Donald Trump predicts taxing Chinese goods, one of Amazon’s challenges.

In addition to its revenue, Amazon is struggling with a number of other issues. The prospect that these tariffs will have a large impact on Amazon’s competitors in the e-commerce industry, such as Temu and Shein, does not have any impact on Amazon’s dominant market position.

Amazon is in a strong position to withstand such cost hikes because of the large infrastructure it possesses in the United States, its ability to expedite shipment, and the lower tariff barriers. The presence of these variables will allow Amazon to continue to maintain its advantage over its competitors.

The Haul platform was introduced by Amazon in November 2024 with the intention of competing with the fast-fashion companies in China. At Haul, you may get some of the most reasonable prices that are currently available on the market.

However, Amazon’s physical sites are experiencing difficulties, despite the fact that the company’s shipping network is operating well. In the year 2024, more than nine billion items were delivered all across the world on the same day or the following day, thereby setting new records for delivery speed.

In the previous year, users of the United States Prime program were able to save more than $95 billion by taking advantage of free delivery. There was a reduction of over $500 in delivery costs as a result of the order placed by the typical customer.

Amazon’s rise will be compared to that of Google (GOOGL -7.69%), which has not been able to spark the interest of Wall Street in the past. Everyone will be doing this. Before Amazon announces its financial results, this comparison will be made just before the announcement.

Additionally, despite the fact that it is one of the largest employers in the country and has a market capitalization of $2.5 trillion, the internet giant is still concerned about its ability to maintain its dominant positions in cloud services and delivery as well as e-commerce.

SOURCE: QZ