Amazon (NASDAQ: AMZN) posted better-than-expected first-quarter results on Thursday. However, a cautious second-quarter outlook and signs of slowing growth in its cloud business sent shares down over 2% in pre-market trading.
The tech giant reported Q1 earnings of $1.59 per share on revenue of $155.67 billion, beating analyst estimates of $1.37 and $155.29 billion, respectively. The earnings beat was driven by a notable increase in operating income, which rose to $18.4 billion from $15.3 billion in the prior quarter, bolstered by solid performance in North America and its cloud operations.
However, Amazon Web Services (AWS), a key profit center, showed signs of deceleration. Revenue from the cloud unit rose 16.9% year-over-year to $29.27 billion, falling short of Wall Street estimates for $30.9 billion.
Operating cash flow for the trailing twelve months (TTM) increased by 15% to $113.9 billion, up from $99.1 billion a year earlier. Free cash flow, however, fell to $25.9 billion, down from $50.1 billion over the same period last year.
For the second quarter, Amazon (NASDAQ: AMZN) guided for operating income between $13.0 billion and $17.5 billion, below the consensus estimate of $17.82 billion. Revenue was projected to fall between $159.0 billion and $164.0 billion, slightly ahead of expectations at the midpoint of $161.06 billion.
In response to the earnings report, multiple analysts adjusted their outlook on Amazon stock.
- HSBC lowered its price target for Amazon shares to $240 from $280 but maintained a Buy rating.
- BofA Securities raised its price target to $230 from $225 while reaffirming a Buy rating.
- Morgan Stanley also kept its confidence in the stock, maintaining an Overweight rating and a price target of $250.00.
As of the latest update, Amazon (NASDAQ: AMZN) shares are down 2.40%, trading at $185.64.
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David Kirakosyan is a seasoned financial journalist with nearly a decade of hands-on experience in covering the U.S. stock markets. Since 2016, he has written thousands of equity news articles, detailed market analyses, and investment insights for trusted platforms like Benzinga, Investing.com, and StreetInsider. David holds a Master of Science in Finance and is a Level 2 CFA® candidate, reflecting his deep commitment to financial expertise and ethical standards. His reporting combines real-world market experience with a strong academic foundation, helping readers make informed decisions backed by reliable information. Read Full Bio
