Amazon Q2 earnings preview: AI bets, cloud growth, and tariff changes in the spotlight
Amazon reports earnings for the second quarter of 2025 on Thursday, July 31. (GeekWire File Photo / Todd Bishop)
Amazon's infrastructure investments and cloud business will go under the microscope Thursday when the company reports second-quarter financial results — with Wall Street looking for signs that the tech giant's big bet on artificial intelligence is translating into growth.
The company disappointed investors in May with a softer-than-expected forecast for Q2 operating profits, but analysts are more optimistic heading into the earnings report.
Wedbush analysts cited 'encouraging US retail data, healthy advertiser sentiment, strong AWS demand, and continued efficiency gains across the business that should drive upside to margin expectations,' in a July 30 research report previewing Amazon's earnings.
Here are the latest Wall Street estimates, according to Yahoo Finance:
$162.1 billion in revenue, up 9.5% from a year ago
Earnings of $1.33 per share, up 5.6% from the same period last year
Analysts' projections would put Amazon near the midpoint of its prior revenue forecast and toward the high end of its projected operating income range.
One reason for the optimism: The tariff outlook has improved since last quarter, contributing to a more bullish tone from analysts. For example, Morgan Stanley raised its 2026 earnings estimate for Amazon from $7.35 to $8.00, citing a 'more manageable' trade environment.
Amazon still generates the largest portion of its net sales from online stores, which accounted for about $57 billion or 37% of total net sales in the first quarter of this year.
The annual Prime Day sales event took place after the quarter ended, from July 8-11, so the results won't be included in the numbers, but Amazon executives are likely to provide a few additional details potentially indicating how the results will impact third-quarter earnings.
The company makes most of its operating profits from Amazon Web Services — about $11.5 billion in the first quarter, or 63% of Amazon's total operating profits of $18.4 billion.
AWS revenue rose 16.9% to $29.3 billion in Q1, taking the cloud unit's annual revenue run rate to a record $117 billion.
The growth 'speaks to the durability of the business even through GPU-related supply constraints that are expected to ease in 2H,' Morgan Stanley analysts wrote, referring to shortages in the key chips for training and running AI models.
Like other tech giants, Amazon is spending big to build out infrastructure for AI and cloud services. Morgan Stanley raised its 2025 and 2026 Amazon capital expense forecasts to $111 billion and $134 billion, respectively — up 6–7% from prior estimates — with the majority going toward technology and infrastructure.
Other areas to watch: Amazon's Project Kuiper satellite internet venture, its partnership and investment in AI startup Anthropic, and whether the company signals further increases in capital spending as it races to build out infrastructure for the next phase of generative AI.
Check back Thursday afternoon for full coverage.
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