Amazon’s stock is enjoying a boost today following blowout earnings from Meta and Microsoft. Earnings from the two companies surpassed expectations, restoring confidence that big tech is sheltered from the impact of tariffs. However Amazon will be tested on this tomorrow as the company releases its own earnings.
Out of the four large cap tech stocks to report this week (Amazon, Apple, Meta, and Microsoft), Amazon and Apple are probably most vulnerable to tariff impacts. Amazon’s online store sales generate the majority of their revenue, contributing $247 billion out of the total $638 billion last year. Products sold on Amazon are especially sensitive to trade uncertainty, so investors will be looking at some insights from Amazon’s leadership about those impacts on the earnings call.
Looking beyond online store sales, Amazon has plenty of other growing revenue sources, especially in their AWS Cloud and advertising segments. These two revenue streams are growing the fastest and are the most profitable, making them the most important numbers to deliver on this quarter. Meta’s ad revenue grew 21% this quarter, perhaps signaling that Amazon will also post strong growth, but also setting the bar high. Microsoft’s Azure Cloud services were a large piece of their growth this quarter, also setting the bar high for Amazon.
Amazon’s next phase of growth is being driven by its aggressive push into artificial intelligence. The company’s AI business is growing rapidly, surpassing the early trajectory of AWS and emerging as a potential third major revenue pillar alongside AWS and advertising. Amazon plans to increase capital expenditures to $100 billion in 2025, up from $83 billion in 2024, with most of it going toward AI infrastructure in AWS. This marks one of the largest AI buildouts in the industry.
Recent initiatives include Amazon Bedrock AgentCore, expanded AI tools in the AWS Marketplace, and a fund just to accelerate agentic AI. AI is also being used across operations to improve delivery accuracy, predict demand, and support robotics. These efforts are already delivering results. Bedrock’s customer base has grown 4.7 times in 2024, showing strong enterprise adoption. As businesses continue to embrace AI, Amazon is positioned to gain significant market share. Investors will be watching how these investments drive revenue and strengthen Amazon’s position across cloud, retail, and logistics.
Whether you’re in or looking to get in, Amazon is one those companies that’s likely to be around for a long time. They’re headed towards $1 trillion in annual revenue, something a company has never achieved before (racing Walmart), and the business is very well ran. This is a buy and hold name, especially through the AI boom.
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