Guys! It's finally happening. Amazon is releasing their earnings today. The stock moved down last earnings, up the one prior, down the one before that, up before that. It's been kinda bouncing back and forth. So you might think I'm uncertain this time around, but I'm not. [Link to my previous post](https://www.reddit.com/r/wallstreetbets/comments/1kbnosv/everything_about_metas_earnings_tonight/) on META. [Link to my RDDT post for today's earnings](https://www.reddit.com/r/wallstreetbets/comments/1kcgypg/why_im_getting_calls_for_rddts_earnings_today/). Now that I've established my track record, let's get into it.
Right now it’s all about tariffs, of course. Has anyone read the recent report that suggested the company might start showing tariff costs on product listings? That resulted in a phone call from Trump to Amazon founder Jeff Bezos. Predictably, Amazon afterwards denied the claim, stating the proposal was “never approved” and that displaying tariff costs “is not going to happen.” Lmao.
Still, questions linger. [Loop Capital’s Rob Sanderson](https://www.linkedin.com/in/rob-sanderson-7b049947/), a 5-star analyst ranked among the top 4% of Wall Street pros, notes it’s unclear how Amazon will deal with all this recent tariff bs. According to management, though, the likely scenario is straightforward: third-party sellers will simply pass on the higher costs to customers.
That, says Sanderson, will have “some elasticity impact on demand but is GMV accretive on a unit basis.” In any case, while it remains to be seen how the company will manage Chinese supply for 1P sales and “how quickly it passes through price increases,” he thinks it is “only a transitory risk at worst.”
Tariff chaos aside, as for what to expect from the readout, Sanderson believes the consumer environment in Q1 remained sluggish but largely in line with expectations, and that Amazon performed well under the circumstances. The Department of Commerce’s proxy for e-commerce (non-store retailer sales) grew 4.2% in Q1, with growth accelerating each month and reaching 6.1% in March. The truth is, retail stores are dying and companies like amazon are picking up the slack. [Online shopping will be a majority of all shopping very soon.](https://optinmonster.com/online-shopping-statistics/) And because of this, AMZN is one of my longer share holds.
Going back to what the analyst was saying specifically in regards to today's earnings: “This bodes well for 1Q results if directionally correct with management providing guidance off the weakest month of the quarter." He also thinks these trends have mostly carried into April and that tariff-related volatility has not yet had a significant impact on consumer spending.
As industry checks across cloud service providers (CSPs) indicate sustained positive momentum despite broader macro uncertainty, I believe AWS will deliver solid results today. The consensus margin estimate of 35.7% (a 190 basis point year-over-year decline) could turn out to be conservative, even when accounting for increased CapEx and a revenue mix shift toward generative AI, which I assume comes with lower margins.
This is taking place against a backdrop where the digitization of workflows has become a top priority for execs globally, driven by the rise of generative AI. While mainstream IT use cases for AI are still taking shape, there is an “abundance of demand” from early adopters, and even slower-moving companies are accelerating their cloud migration efforts. As budgets are already funded, Sanderson doesn’t expect significant budget changes unless companies face major spending cuts.
Did anyone see the Google results last week? I did a post on GOOG as well. Their results reinforce this view with strong growth at GCP and commentary on capacity shortages and inability to meet current demand.
Bottom line, ahead of earnings, Sanderson maintained a Buy rating on AMZN shares, while his $285 price target factors in a 12-month gain of ~50%. ([Sanderson’s track record](https://www.tipranks.com/experts/analysts/rob-sanderson)) Like I said, I have shares as a long term hold. For earnings however, I got [AMZN 1/16/26 230c](https://i.imgur.com/odrEvKu.png). This is a position I purchased a while ago, and it's unfortunately down quite a bit. But I think with today's earnings, it'll be good.
