Amazon (AMZN) will release its Q1 2025 earnings tomorrow, May 1, as markets prepare for a big earnings week. Apart from Amazon, tech giants like Meta Platforms (META), Microsoft (MSFT), and Apple (AAPL) are also set to report their March quarter earnings this week. Earnings season comes this quarter amid heightened uncertainty over tariffs, which have prompted several companies like Snap (SNAP) and General Motors (GM) to withhold guidance.

Tariffs are a headwind for Amazon, as a big percentage of goods sold on its e-commerce platform are sourced from China. The company was said to be contemplating displaying tariff costs alongside the product price, but amid the uproar from President Donald Trump’s administration, it clarified such a plan was “never approved” and is “not going to happen.”

Amazon shares are down 17.9% in the year to date, which is not really terrible considering the broader tech selloff. In this article, we’ll look at Amazon’s Q1 earnings estimates and analyze whether the stock is a buy heading into the confessional.

Amazon Q1 Earnings Preview

Analysts expect Amazon’s Q1 revenues to rise 8.2% YOY to $155.1 billion. During its Q4 2024 earnings call, Amazon forecast revenues between $151 billion and 155.5 billion for Q1. The company said that its guidance baked in “an unusually large, unfavorable impact” from forex movements. 

Analysts are modelling Amazon’s Q1 earnings per share (EPS) to rise by 19.47% year-over-year to $1.35. The company does not provide EPS guidance but forecast operating income between $14 billion to $18 billion for Q1, compared to $15.3 billion in the corresponding quarter last year.

5 Things to Watch in Amazon’s Q1 Earnings Report

1. A lot has changed since Amazon released its Q4 2024 earnings. The U.S. dollar has weakened against major currencies, which is a tailwind for Amazon. However, on the downside, the U.S. economy has weakened, and tariffs could further dent Amazon’s e-commerce sales.
2. Businesses might hold back on their spending, which could be a headwind for Amazon’s enterprise-focused Amazon Web Services (AWS). The segment is a key driver of Amazon’s profitability, and any signs of slowdown in that business would spook markets.
3. While I expect Amazon’s Q1 revenue growth to be reasonably strong, the company’s Q2 guidance will be crucial to watch. I expect a wider-than-expected range in the guidance, given the tariff uncertainty. Notably, for the last few quarters, Amazon’s revenue guidance has disappointed, and the current quarter might be no different.
4. During the Q1 earnings call, it will also be pertinent to watch for commentary on Amazon’s burgeoning capex toward artificial intelligence (AI) as markets are increasingly scrutinizing these investments in light of the macroeconomic slowdown.
5. Amazon’s digital advertising business will also be in focus as both Alphabet (GOOG) and Snap have warned of headwinds in that space, particularly related to changes to the de minimis rule that allowed for imports of goods valued below $800 without taxes. 

Is AMZN Stock a Buy Ahead of the Report?

I am quite bullish on Amazon for the long term, given the company’s presence in multiple high-growth and structural stories like e-commerce, cloud, AI, streaming, and digital advertising. Moreover, while some Big Tech peers are struggling to monetize their AI capex, Amazon has already started to see results.

All said, it is hard to build a compelling case for buying Amazon stock ahead of the Q1 report given the short-term headwinds. I would, however, be a buyer of any significant weakness in the shares following the Q1 earnings and add to my existing positions.

Amazon Stock Forecast

Amid the tariff chaos, sell-side analysts have been slashing the target prices for several stocks in a flurry. UBS, Stifel, Oppenheimer, Goldman Sachs, Scotia Bank, and Cantor Fitzgerald are among the brokerages that have lowered Amazon’s target prices this month. Raymond James went a step further and downgraded the stock from a “Strong Buy” to “Outperform” while cutting the target price from $275 to $195.

Despite these target price cuts, Amazon’s mean target price is $246.43, which is nearly 37% higher than current prices. Moreover, the stock has a consensus rating of “Strong Buy” from the 52 analysts covering the stock, and several have named it a top pick for 2025.