Amazon will report earnings on Thursday, joining other tech giants lifting the hood on financial performance for the second quarter.
Wall Street expects Amazon to report revenue of $148.5 billion, up about 11% year-over-year, and earnings per share of $0.94, up from $0.65, according to Yahoo Finance.
Amazon Web Services and advertising — two of the company’s biggest profit drivers — will once again be in the spotlight as analysts look for those segments to continue driving overall operating income.
Analysts from Wedbush said in a report last week that they are watching for “emerging AI monetization,” or any revenue driven by the company’s various AI-related services offered by AWS.
“Investor perception of Amazon’s AI initiatives and the competitiveness of AWS remains a topic of debate, but we think the company is in the process of validating its status as an AI beneficiary with accelerating AWS growth and growing contribution from recently launched AI products and services,” Wedbush wrote in its report.
Bank of America analysts wrote last week that AWS should benefit from “increasing consumption spend around model training.” They flagged Google Cloud’s recent growth, revealed last week, as a positive sign for AWS.
Amazon is also looking to use AI in other parts of its business. The Wall Street Journal reported last week that Amazon will be launching a paid tier for Alexa as soon as this month.
Wedbush analysts said they are monitoring any updates on capital expenditure growth as AI investments increase.
AI-related impacts are also key focus for Microsoft’s earnings on Tuesday.
Bank of America analysts cited multiple data sources showing acceleration for overall e-commerce, which could bode well for Amazon’s retail business. “We think US revenue upside could be driven by continued market share gains (driven by delivery speeds, selection improvements, and price), [third party] fee increases, and potential advertising contribution, likely driving margin upside too,” analysts wrote.
Amazon announced Tuesday that more than 5 billion items have been delivered on the same day or next day so far this year — up 30% year-over-year. Amazon offers same-day delivery in more than 120 U.S. metro areas and has focused on “regionalizing” its fulfillment network to speed up shipping times.
Amazon’s stock is up more than 20% this year, and up nearly 40% over the past 12 months.
It hasn’t been a great month for tech stocks following a boost from the AI boom. Reports from Alphabet and Tesla last week revealed slower sales in certain business segments. Meta reports Wednesday and Apple reports Thursday.
