Amazon (AMZN) stock rose 3% in premarket trading ahead of its Q1 earnings report, with expectations of $1.36 EPS and $155.1 billion revenue, an increase from last year’s $0.98 EPS and $143.3 billion revenue. The company faced scrutiny over potential tariff impacts after a report led to tensions with the Trump administration. Although Amazon denied plans to raise prices to reflect tariffs, UBS estimates that over 50% of its products may see price increases. Investors are also looking for returns on Amazon’s significant AI investments, which parallel spending by rivals like Alphabet and Microsoft.
Amazon (AMZN) shares surged 3% in premarket trading on Thursday as anticipation builds for its first-quarter earnings report, with investors keen to understand how upcoming tariffs may affect the company’s operations.
For this quarter, expectations indicate Amazon will report earnings per share (EPS) of $1.36 and revenue of $155.1 billion, based on Bloomberg consensus estimates. This represents an increase from last year’s EPS of $0.98 and revenue of $143.3 billion for Q1.
At close: April 30 at 4:00:01 PM EDT
This announcement from Amazon follows a clash with the Trump administration on Tuesday concerning a report from PunchBowl News, suggesting the company was preparing to add the effects of tariffs to product pricing.
White House press secretary Karoline Leavitt condemned the approach as “a hostile and political act,” with CNN’s Alayna Treene reporting that President Trump personally reached out to Bezos to express his concerns.
In response, Amazon has rejected the notion that it planned to implement tariff pricing on its primary e-commerce platform.
“Our team managing the low-cost Amazon Haul store explored the potential of including import charges on specific items,” stated Amazon spokesperson Tim Doyle. “However, this was never approved and will not take place.”
During a briefing on Tuesday, Trump praised Bezos, stating, “Jeff Bezos is very nice. Terrific. He resolved the issue promptly. He did the right thing. Good guy.”
This situation underscores the challenging landscape tech companies must navigate as they deal with the realities of Trump’s tariffs and the potential for retaliatory actions from the government.
With products imported from China facing a 145% tariff and others encountering a universal 10% tariff, UBS analyst Stephen Ju mentions in an investor note that over 50% of products sold on Amazon could encounter tariff-related price hikes.
“As a result, consumers may need to make tougher decisions about their spending,” Ju noted.
“We should also consider the potential secondary impacts, as US exporters might experience reduced revenue, leading them to adjust their workforce and business needs, which could affect global employment and international [gross merchandise value] growth,” Ju added.
In its upcoming report, Amazon must also demonstrate that its investments in AI are yielding returns. Like its competitors Alphabet (GOOG, GOOGL) and Microsoft (MSFT), Amazon is investing heavily in developing AI data centers and infrastructure to support its generative AI initiatives for businesses and individuals. However, investors are still looking for tangible results from these investments.