4 key takeaways from Amazon's Q2 earnings
On Thursday, the e-commerce giant reported $167.7 billion in net sales and earnings of $1.68 per share, which smashed analyst estimates.
Despite the strong results, the company's stock fell 7% in after-hours trading. Investors were spooked by Amazon's profit outlook for the third quarter, which projected operating income between $15.5 billion and $20.5 billion, against Wall Street's estimate of $19.41 billion.
From where Amazon is in the AI race to competition with Starlink, here are our four key takeaways from the Q2 earnings call.
1. Tariff impacts have been limited, so far
CEO Andy Jassy said tariffs haven't had a major impact on the business so far in 2025. He cited strong Prime Day sales as evidence that consumer demand remains resilient, though Prime Day was in July after Q2 wrapped.
Jassy said on the earnings call that the company hasn't seen "diminishing demand" or "meaningfully appreciating prices" so far, though he said that could change later in the year.
He added during an analyst question session that it's still unclear "who's going to end up absorbing the higher costs."
Jassy also pointed to Amazon's 2 million third-party sellers as a key advantage, which often offer more flexible prices.
"Tariffs appear overstated for now, and Amazon remains the go-to destination for online deals and continues to draw strong consumer and brand engagement," Brent Thill, senior technology research analyst at Jefferies, wrote in a recent note before the earnings report.
2. Competition with Elon Musk's Starlink
Jassy said the race for satellite-based broadband internet is now largely a two-player game, between "the incumbent" — widely understood to be Musk's Starlink — and Amazon's own Project Kuiper.
On the earnings call, Jassy told investors that price will be a key differentiator for Kuiper, along with Amazon's existing relationships with enterprise and government clients, many of whom are also interested in its AI offerings.
While Kuiper has faced delays, Jassy said the service is on track to enter commercial beta later this year or in early 2026.
In April, Amazon sent its first batch of 27 Kuiper internet satellites into low Earth orbit. At least 54 crafts are in orbit; Amazon plans a constellation of 3,236 satellites.
3. Excitement around Alexa+
Amazon touted Alexa+, its AI-enabled voice assistant that launched in February, as an action-focused chatbot that can complete tasks that others can't.
"She's much more intelligent than her prior self," Jassy said of the improvement over the prior version of Alexa. "She's much more capable, and I would say unlike the other chatbots that are out there today, who are good at answering questions, but really can't take any action for you, Alexa+ can take a lot of action for you."
Some examples of what Alexa+ can do include playing music, moving music between devices, drawing curtains, turning lights on, and changing the thermostat temperature, Jassy said.
Millions of customers have been given early access to Alexa+, and Jassy told the call that the feedback has been "very positive."
Jassy also said that Alexa+ could incorporate advertisements or a subscription element in the future.
4. Jassy was asked if AWS is behind in the AI race
Jassy faced tough questions about how AWS is addressing competition from its cloud computing rivals.
Brian Nowak, an analyst from Morgan Stanley, asked Jassy to respond to the Wall Street narrative that "AWS is falling behind" in the generative AI race and losing share to its competitors.
Jassy said it was "early" in the AI space and that the industry was "top-heavy." He didn't address directly how AWS is responding to competitors, but said he thinks the company is well-positioned as AI adoption expands.
"Remember, 85% to 90% of the global IT spend is still on premises. If you believe that equation is going to flip, which I do, and we do, you have a lot of legacy infrastructure that you've got to move," Jassy said.
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