Last night, Amazon reported results that exceeded analysts' expectations. In the first quarter, its revenue rose 9% year-on-year to $155.7bn, compared with a consensus estimate of $155.04bn. And for the current quarter, the company expects net revenue of between $159bn and $164bn, compared with an average estimate of $160.91bn, according to data compiled by LSEG.

This outlook, which is well above analysts' estimates, may have reassured investors, as the e-commerce giant appears to be on the front line of the trade war launched by Donald Trump. Amazon generates 60% of its revenue in the United States (excluding AWS). And according to a survey conducted by Jungle Scout in 2024, more than 70% of products sold on Amazon are manufactured in China.

To make matters worse, Amazon angered the White House earlier this week after Punchbowl News reported that the e-commerce giant was planning to display the additional costs associated with customs duties on its website. In a press conference on Tuesday, the White House spokesperson described the move as "hostile and political." The company was quick to quell the incident by issuing a statement saying that the idea had only been considered for its low-cost product platform Haul, and, more importantly, that "this proposal was never approved and will not be implemented."

Slowdown in cloud growth

But while the general public knows Amazon as an e-commerce giant, investors are mainly focused on its cloud division, AWS (Amazon Web Services). This is because it accounts for most of the company's profitability and is also where growth is strongest. And it is this point that has disappointed investors: AWS's growth slowed in the last quarter. The division's revenue grew by 17%, compared with 19% in the Q4 2024. Management attributes this slowdown in growth to capacity constraints.

This is also below analysts' expectations, which were for growth of 17.4%. Above all, it contrasts with the results published by Microsoft on Wednesday evening. The Redmond-based company saw growth in its cloud division (Azure) accelerate again in the first quarter, to +35% year-on-year.

However, while AWS accounted for only 19% of revenue in the first quarter, 63% of Amazon's operating profit came from this division. This led to a negative reaction from the stock, which fell 3% after the close of trading on Wall Street.