Amazon is set to report its earnings for the second quarter, with analysts expecting revenue of $148.5 billion, up 11% year-over-year, and earnings per share of $0.94, up from $0.65. Amazon Web Services and advertising are expected to continue driving overall operating income for the company. Analysts are also watching for any revenue driven by Amazon’s AI-related services offered by AWS, with Wedbush noting that the company is validating its status as an AI beneficiary with accelerating AWS growth and growing contribution from AI products and services.
Bank of America analysts believe that AWS will benefit from increasing consumption spend around model training, with Google Cloud’s recent growth seen as a positive sign for AWS. Amazon is looking to use AI in other parts of its business, with plans to launch a paid tier for Alexa as soon as this month. Analysts are monitoring any updates on capital expenditure growth as AI investments increase and analyzing the impact of AI-related initiatives on the company’s overall performance.
AI-related impacts are also a key focus for Microsoft’s earnings, with Bank of America analysts citing acceleration in overall e-commerce as a positive sign for Amazon’s retail business. They believe that US revenue upside could be driven by continued market share gains, third-party fee increases, and potential advertising contribution. Amazon continues to focus on improving delivery speeds, selection, and pricing to drive margin upside. The company announced that more than 5 billion items have been delivered on the same day or next day so far this year, up 30% year-over-year, showcasing its commitment to faster shipping times.
Despite a challenging month for tech stocks following a boost from the AI boom, Amazon’s stock has been performing well, up more than 20% this year and nearly 40% over the past 12 months. Reports from Alphabet and Tesla revealed slower sales in certain business segments, while Meta reports Wednesday and Apple reports Thursday. Amazon’s earnings report will shed light on the company’s financial performance and the impact of AI-related initiatives on its various business segments.
Overall, analysts are optimistic about Amazon’s earnings report, with a focus on the company’s revenue growth, earnings per share, and the performance of key segments such as AWS and advertising. The use of AI in various parts of Amazon’s business is expected to drive overall operating income and validate the company’s status as an AI beneficiary. As the tech giant continues to innovate and invest in AI, analysts will be closely monitoring any updates on capital expenditure growth and the competitiveness of AWS in the market.
