Amazon Posts Profit Surge Despite Trade War Risks

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Amazon Posts Profit Surge Despite Trade War Risks \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ Amazon reported strong first-quarter earnings and revenue growth, led by gains in cloud computing and AI investments. However, President Donald Trump’s steep tariffs on China have cast uncertainty over the company’s outlook. Experts warn that trade disruptions may affect shipping and consumer pricing this summer.

Quick Looks

Net Income: $17.13 billion, $1.59 per share
Revenue Growth: $155.7 billion, up 9% YoY
AWS Revenue: $29.3 billion, up 17% YoY
Capital Spending: $25.02 billion, vs. $14.92 billion last year
AI Investment: Billions in AI chips, data centers, and models
Tariff Uncertainty: 145% tariffs on China threaten supply chain
Retail Impact: Smaller businesses may face greater risks
Stock Reaction: Shares dropped nearly 5% in after-hours trading
Key Season Ahead: Retailers brace for back-to-school shipping crunch

Deep Look

Amazon delivered a strong financial performance in the first quarter of 2025, underscoring its dominance in a complex retail and tech landscape shaped by consumer belt-tightening, shifting economic signals, and unpredictable trade policy.

The company announced Thursday that net income surged to $17.13 billion, or $1.59 per share, for the quarter ending March 31—an impressive jump from $10.43 billion (98 cents a share) during the same period a year ago. Revenue also climbed to $155.7 billion, marking a 9% increase compared to last year’s $143.3 billion.

Behind the numbers is a company navigating multiple growth vectors, including continued expansion in its flagship cloud unit, Amazon Web Services (AWS), and aggressive moves into generative AI, all while confronting rising political and economic pressures, especially in the form of tariff threats from President Donald Trump.

AWS and AI Drive Growth

Amazon’s cloud computing powerhouse, AWS, reported $29.3 billion in sales, a 17% year-over-year increase, as businesses increasingly rely on cloud infrastructure and AI tools. The company has been positioning itself at the center of the AI arms race, building out custom chips and increasing its dependency on AI-focused hardware partners like Nvidia.

Amazon has also developed its own AI models and integrated generative AI into customer-facing services and back-end systems, spanning retail search, logistics optimization, and AWS tools. These efforts reflect the broader industry trend of embedding AI into every layer of tech infrastructure.

To support this push, Amazon spent a staggering $25.02 billion on property and equipment, significantly higher than the $14.92 billion spent in the same period last year. Much of this is earmarked for data center expansion, which will house AI computing clusters and serve enterprise clients.

Trade Policy Threatens Stability

Despite the upbeat earnings report, Trump’s aggressive trade agenda has cast a shadow over Amazon’s near-term outlook. His administration recently announced 145% tariffs on Chinese goods, including many categories that impact U.S. retailers directly—from electronics and apparel to shipping containers and raw materials.

While Amazon’s scale, global logistics network, and pricing leverage may help it absorb some shocks, smaller retailers lack such flexibility, creating a two-tier retail environment. Analysts say many vendors have paused shipments heading into key sales seasons like back-to-school, fearing customs delays, higher costs, or rerouted supply chains.

“Trump’s erratic tariff policy is effectively a supply chain hazard,” said one industry analyst. “Amazon can mitigate that risk better than most—but even it’s not immune.”

The Seattle-based e-commerce giant, known for its efficiency in managing supply chains, has not disclosed detailed strategies to handle the tariff wave. However, company insiders say Amazon is actively working with partners to assess cost pass-throughs and alternative sourcing strategies.

Retailers Brace for Shipping Disruptions

Retail experts warn that uncertainty caused by tariffs could lead to inventory shortages later this summer, especially for back-to-school and early holiday shipments. Many U.S. retailers are holding or diverting product flows, resulting in gaps in planning and potential pricing volatility in the coming months.

Amazon’s vast fulfillment network and increasingly vertically integrated logistics operations may allow it to weather the storm better than smaller rivals. But with shipping delays possible and consumer demand shifting, even Amazon’s margins could tighten, particularly in retail categories affected by tariff hikes.

Wall Street Response

Despite the solid financials, Amazon’s stock fell nearly 5% in after-hours trading Thursday. Investors appeared to be reacting to uncertainty around trade policy and macroeconomic conditions, even as the company continues to expand in cloud and AI.

Still, many analysts remain bullish on Amazon’s longer-term trajectory, citing its diversified business model, strong balance sheet, and growing share in AI infrastructure as key pillars of resilience.