Amazon Earnings Preview: Can the Company Buck the Tariffs?
Amazon Earnings Preview: Can the Company Buck the Tariffs?
By:Mike Butler
Shenzhen, China, is home to over 100,000 Amazon businesses, and the resulting revenue surpasses $35 billion annually
- Amazon will report quarterly earnings after the market closes tomorrow.
- The company is expected to report earnings per share of $1.36 on $155.11 billion in revenue.
- Both estimates are lower than last quarter.
- Amazon was reportedly preparing to display tariff costs online but nixed the idea after receiving a reprimand from the White House.
Jeff Bezos hit the headlines this week ahead of Amazon (AMZN) earnings after a report surfaced that the company would list tariff costs for merchandise. After a whirlwind of back and forth with President Trump, Bezos said that would never happen on Amazon's main site. While this is a surprising turn of events, it certainly shows the effect tariffs can have on massive tech companies.
It's said the city of Shenzhen, China, is home to over 100,000 Amazon businesses, and the resulting revenue surpasses $35 billion annually. Obviously, Chinese the implications of Chinese tariffs could play a massive role in Amazon's business forecast.
The company will report quarterly earnings after the market closes on Thursday, and earnings-per-share (EPS) and revenue estimates are both lower than last quarter. It has boasted a pretty spotless earnings history, only missing revenue estimates once in the past year.
Amazon is expected to report an earnings-per-share of $1.36 on $155.11 billion in revenue.
AZMN stock opened 2025 trading at $222.03 and reached an all-time high of $242.52 in February. Through the tariff uncertainty, the stock dropped as low as $161.38. It currently sits around $187 per share.
In the last earnings call, Andy Jassy, president and CEO of Amazon, offered company insight: “The holiday shopping season was the most successful yet for
Amazon, and we appreciate the support of our customers, selling partners and employees who helped make it so.”
He also said that “when we look back on this quarter several years from now, I suspect what we’ll most remember is the remarkable innovation delivered across all of our businesses, none more so than in AWS where we introduced our new Trainium2 AI chip, our own foundation models in Amazon Nova, a plethora of new models and features in Amazon Bedrock that give customers flexibility and cost savings, liberating transformations in Amazon Q to migrate from old platforms, and the next edition of Amazon SageMaker to pull data, analytics and AI together more concertedly. These benefits are often realized by customers (and the business) several months down the road, but these are substantial enablers in this emerging technology environment and we’re excited to see what customers build.”
Looking at the implied volatility of the options market, we can see a moderate expected stock price range for this week. With the stock hovering around $187 per share, and a +/- $11.42 stock price range for this week, Amazon has an implied move of just over 6% of the notional value of the stock price. This is on the lower end of the range for most earnings announcements, but certainly higher than other Magnificent Seven tech stocks so far.
Looking out in time, we can see a +/- $23.32 expected stock price range through July 2025. There is a decent amount of weight being placed on this earnings announcement relative to the implied stock price range a few months out, considering this week accounts for almost half of the expected range through July.
Bullish on Amazon stock for earnings
If you're bullish on AMZN stock for earnings, you want to see strong performance in EPS and revenue and a sound plan for the future in regard to artificial intelligence and how the company may avoid being hit hard with tariffs. Some things it cannot control, but others may be shifted to other countries that are affected less by tariffs than China.
Bearish on Amazon stock for earnings
If you're bearish on AMZN stock for earnings, you're looking for an earnings miss this quarter with weak guidance for the rest of the year. The tariff cost drama doesn't help the bullish case for Amazon, and the high implied volatility for the earnings call could play into the hands of bears more than bulls because bullish investors want to see a more stable stock price in the long run.
Join us on Options Trading Concepts Live at 11 a.m. CDT for a deeper look at Amazon and Apple options trading strategies ahead of the announcements after the market closes.
Mike Butler, tastylive director of market intelligence, has been in the markets and trading for a decade. He appears on Options Trading Concepts Live, airing Monday-Friday. @tradermikeyb
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