Amazon stock rose after the tech giant reported better-than-expected first-quarter results as growth continued to accelerate at its Web Services unit. Revenue rose 17% year over year to $181.52 billion, beating analysts’ consensus estimates of $177.3 billion, according to LSEG data. LSEG said generally accepted accounting principles (GAAP) earnings per share rose 75% to $2.78, beating expectations of $1.64. However, this result includes a pre-tax gain of $16.8 billion in non-operating income related to the investment in Anthropic, so it’s not a very good comparison. Operating profit rose 30% year over year to $23.85 billion, beating the consensus estimate of $20.82 billion. Why Own Your Own Company Amazon is widely known for online shopping, but its real moneymaker is its cloud business. Advertising is also a high-margin, fast-growing business. Investments in a robust e-commerce logistics infrastructure make the company’s online storefront the place to be. Prime offers free shipping, video streaming, and many other perks, and allows users to continue paying monthly. Competitors: Walmart , Target , Microsoft , Alphabet Recent Purchases: April 15, 2025 Purchases Started: February 2018 Conclusion After a lackluster start to 2026, Amazon stock has come back to life, rising nearly 26% to new all-time highs in April. What has changed? The market quickly realized that Amazon and Anthropic’s close relationship was likely to drive AWS growth, and that management’s ambitious $200 billion capital investment program was well worth the investment. The rally set a high bar heading into Wednesday’s print run, but the company’s results cleared it with flying colors, sending shares up about 4% in after-hours trading. Taking a step back, I was pleased to see that Amazon delivered the highest quarterly operating margins in the company’s history across all segments. Yes, AWS is a key part of this story, but improving margins across North America and international operations shows the company is operating more efficiently and has momentum in its high-margin revenue streams. Amazon is firing on all cylinders and, reflecting the latest results, we maintain our rating of 1, which equates to Buy, while increasing our price target from $250 to $300. The club’s namesakes Alphabet, Microsoft and Meta Platforms also reported quarterly results, making big profits on the night. AMZN 1Y Mountain Amazon’s 1-Year Return Commentary Cloud division Amazon Web Services (AWS) revenue growth accelerated to 28.4% from 23.6% in the previous quarter, with revenue of $37.59 billion, beating expectations of $36.9 billion. This was the highest growth rate for the business in 15 quarters. Operating income and operating profit margin also exceeded expectations. Its portfolio of proprietary chips, including Graviton, Tranium, and Nitro, had an annual revenue run rate of more than $20 billion, up from more than $10 billion in the previous quarter. Amazon’s custom chip business has been hugely successful, allowing it to more cost-effectively scale out its infrastructure and reduce its dependence on Nvidia. AWS recently secured multi-gigawatt partnerships with OpenAI and Anthropic to use Trainium chips. But don’t expect the relationship between AWS and Nvidia to end. CEO Andy Jassy said on a conference call that he has “tremendous respect” for the company and “will continue to be a partner for the foreseeable future, and there will always be customers who want to run Nvidia on AWS.” AWS backlog ended the quarter at $364 billion, up from $244 billion in Q4. And this new figure is actually an underestimate, as it doesn’t include the recently announced deal with Anthropic worth over $100 billion. With such a large backlog, we argue that Amazon has prospects to continue spending aggressively. As for the company’s remaining business segments, it posted strong sales across its online stores, subscription services, third-party seller services, advertising, and other (including healthcare, licensing, co-branded credit cards, and other businesses). We focus on advertising and third-party seller services because they are both high-margin revenue sources. Only brick-and-mortar stores fell short of estimates. By region, sales in North America rose 12% to $104 billion, beating consensus estimates by about $1.8 billion. Operating margin expanded 165 basis points from last year. International revenue increased 19% year over year, beating consensus estimates. Operating margin increased 55 basis points compared to the same period last year. In terms of capital expenditures, Amazon spent about $44.2 billion in the quarter, slightly above the consensus estimate of $43.95 billion. The company did not change its outlook for capital spending of $200 billion this year. Guidance Amazon provided solid guidance in the second quarter. Keep in mind that these numbers are typically conservative. The company expects net sales to increase 16% to 19% year over year to $194 billion to $199 billion. The midpoint of $196.5 billion is above the consensus of $188.96 billion. Operating profit for the second quarter is expected to be between $20 billion and $24 billion. The midpoint of $22 billion matched the consensus estimate of $22.64 billion. The guide includes a $1 billion year-over-year increase in costs associated with Amazon Leo, a low-orbit satellite network. The guide also takes into account increased transport costs due to fuel inflation, partially offset by recently introduced fuel and logistics surcharges. (The Jim Cramer Charitable Trust is long AMZN. See here for a complete list of stocks.) 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