Amazon Beats But Wall Street Soils Themselves Over Guidance—Shares Tank 5%...

In case you missed it, Amazon dropped their earnings yesterday, and on paper it looked like a bigly win: $1.59 EPS vs. $1.36 expected, $155.67 billion in revenue vs. $155.04 billion projected. A clean beat. Daddy Bezos would be proud. But Wall Street thought differently. And every analyst within a mile radius soiled themselves over the one thing that makes every hedge fund manager break into hives: guidance. 

(Source: Giphy) 

In short, Amazon’s Q2 forecast came in soft. They’re expecting operating income somewhere between $13 billion and $17.5 billion, however, the Street was looking for $17.8 billion. Whamp whamp whaaa. Naturally, the stock tanked -6% after hours (it’s now recovered up 1% pre-market). Now obviously, instead of just owning the suck, Amazon wrapped the forecast in a nice little bow titled: “tariffs and trade policies”, because of course, 

Which to be fair, is somewhat valid. Amazon’s retail arm is chained to China like a junkie to a dealer. Over half of its sales come from third-party sellers, and guess where they get their inventory? That’s right. The country currently getting smacked with Trump’s economic belt again. Some of these sellers have already hiked prices, slashed ad budgets, or just quietly taken it on the chin because they don’t have a choice. Amazon won’t say it, but you can smell the panic. It’s in the margins.

(Source: CNBC) 

In fact, the store brand Jeff Bezos (read: Andy Jassy), told investors that Amazon’s seller base is “diverse,” and that not all of them will pass the cost on to consumers. Are you sure about that? He also made the galaxy-brain comparison that tariffs are like COVID: chaotic, unpredictable, and ultimately survivable. 

But, but, but… then there was AWS. The favorite son. The division that used to carry the whole friggin’ company on its back. AWS pulled in $29.3 billion, which technically missed estimates for the third quarter in a row. Revenue growth slowed again, 17%, down from 18.9% last quarter. That’s not a collapse, but for a unit that was once untouchable, it’s starting to look distinctly... human.

(Source: Yahoo Finance) 

Meanwhile, the ad business is the only thing on fire, in a good way. It clocked $13.92 billion, up 19% year-over-year, which presumably is the only reason this earnings report didn’t go full trainwreck. Advertising doesn’t care about tariffs. It doesn’t care about supply chains. It just sits there and prints money while Amazon sells you the same cheap ergonomic chair in seventeen different listings.

Now here’s where it gets extra stupid. Earlier this week, Amazon got dragged into a political pissing match because someone leaked they were planning to show shoppers the cost of tariffs on certain products. Not across the board, just in their bargain-bin storefront, Haul. The White House lost its mind. Amazon immediately backpedaled and explained they were just “thinking out loud” (presumably giving the boot to the one who actually “thought” this out loud LOL). 

(Source: Giphy) 

In the end, Amazon’s earnings was a clinic of how a trillion-dollar company tries to thread the needle between appeasing investors and not getting smoked by economic headwinds. Sure, they’re hedging, and sure, they’re stalling—but at the end of the day, the numbers are still good. It’s just the vibes of the whole thing that’s rotten.

Amazon is still a cash machine, but right now they are nervous. Everyone knows they’ll power through it, but don’t be surprised if they catch a few broken ribs along the way. Meaning, keep your eyes on the stock and place your bets accordingly. Until next time, friends… 

P.S. Oh, I’m sorry, I didn’t know you liked getting rekt. Let’s face it, retail investors get the short end of the stick all day everyday. It’s the smart money’s world, and we are just living in it–only useful when it comes to liquidity purposes in the market. Meaning, if you’re as pissed off as I was when I found out Milli Vanilli was lip syncing the whole time, then it’s time to go from investing blind, to investing smart. Luckily for you, the key is right here as a Stocks.News premium member. Click here to see exactly how our premium members are printing while others quake in the face of today’s market chaos. 

Stocks.News holds positions in Amazon as mentioned in the article.