Amazon has warned it may fail to meet market expectations on its operating income, as concerns over how President Trump’s tariffs will affect its ecommerce business overshadowed strong sales.
The retail and tech giant beat Wall Street expectations in terms of sales, with revenues up 13.3% year on year to $167.7bn (£126.9bn). Amazon Web Services sales jumped 17.5% to $30.9bn (£23.4bn) year on year.
However, the company warned it may not meet expectations on operating income, reporting it would bring in between $15.5bn (£11.74bn) and $20.5bn (£15.5bn), compared with expectations of about $19.4bn (£14.6bn).
As a result, despite the positive numbers, Amazon’s share price fell by over 3% in after-hours trading.
Amazon has endured a lot of uncertainty this financial year, with investors concerned about the impact of Trump’s tariffs and how those would affect its reliance on international sellers for its ecommerce business.
The retailer also drew the personal ire of the president in April, following reports that it planned to itemise tariff-related price increases on its ecommerce platform. No itemised list of tariff price increases was ever published.
The tech giant is also spending huge amounts of money in the ongoing AI race, with competitors such as Google, Meta and Microsoft. Company chief executive Andy Jassy said Amazon’s AI investments meant the brand was in a strong position long-term.
“Our AI progress across the board continues to improve our customer experiences, speed of innovation, operational efficiency, and business growth, and I’m excited for what lies ahead,” Jassy said.
Amazon recently invested in one of the biggest AI startups in the world, Anthropic, to integrate its technology into a variety of its services. It has also been spending tens of billions of dollars on new data centers to power its AWS cloud business and expand its use of generative AI.
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