Amazon reported a 35% surge in profits for the second quarter of 2025, driven by strong performance in its cloud division, Amazon Web Services (AWS), and steady growth in its advertising segment. Net income rose to $9.9 billion, significantly up from $7.3 billion a year earlier. Revenue grew 11% year-over-year, reaching $154.3 billion, reflecting robust consumer demand and improved operational efficiency.

🔹 AWS and Ads Fuel the Growth Engine

Amazon Web Services maintained its leadership in the cloud market, registering 12% revenue growth, as demand for generative AI services and enterprise cloud solutions surged. The advertising unit also delivered a standout performance, with sponsorship and display ad revenue climbing 18%, thanks to enhanced targeting tools and increased merchant adoption.

🔹 Weak Q3 Forecast Disappoints Investors

Despite the strong quarterly earnings, Amazon’s Q3 revenue guidance fell short of Wall Street expectations, triggering a 5% dip in after-hours trading. The company forecasted sales between $153 billion and $158 billion, slightly below analyst projections of $159.4 billion. CEO Andy Jassy cited macroeconomic uncertainty, softening online retail trends, and elevated delivery costs as key reasons for the cautious outlook.

🔹 E-commerce Slows as Shoppers Tighten Spending

While cloud and ads soared, Amazon’s core e-commerce business experienced slower growth. U.S. online sales increased by only 4%, a sign that consumer discretionary spending may be softening amid inflationary pressures and higher interest rates. International sales also saw a minor decline due to foreign exchange headwinds.

🔹 Investor Sentiment Remains Cautious

Analysts remain divided on Amazon’s near-term trajectory. Some see the Q2 results as a strong signal of Amazon’s long-term cloud and AI capabilities, while others point to the guidance as a red flag. “While the fundamentals remain solid, the market is reacting to the cautious tone in Amazon’s forward-looking statements,” said Brian Fitzgerald, an equity analyst at Wells Fargo.