Sawt Falasteen - Amazon revenue climbs 9%, but outlook sends shares lower

The online retail behemoth said sales hit $155.7 billion in the January-to-March period, but its share price dropped as much as four percent in after-hours trading on Wall Street.

Amazon Web Services, the company's hugely successful cloud business, saw sales jump 17 percent to $29.3 billion, with operating profit reaching $11.5 billion as companies increasingly turn to AWS for AI infrastructure.

"We're pleased with the start to 2025, especially our pace of innovation and progress in continuing to improve customer experiences," CEO Andy Jassy said, highlighting new AI offerings including the next-generation Alexa+ virtual assistant.

Amazon said it had launched several AI initiatives during the quarter, including Amazon Nova generative AI models, while expanding its Project Kuiper satellite network to compete with Elon Musk's Starlink.

Looking ahead, Amazon forecast second-quarter net sales between $159 billion and $164 billion, representing growth of seven to 11 percent. But this was lower than what analysts had expected.

The outlook is especially sensitive for investors with speculation high on how the wave of high trade tariffs announced by President Donald Trump's administration will affect Amazon's performance.

Trump has most notably slapped 145 percent levies on China, where many US-bound products are made.

A report that Amazon was going to display the extra cost of the levies for customers on its platform drew a furious response from the White House.

Amazon executive chairman Jeff Bezos called Trump to defuse the drama, and the company quickly said it had no intention of executing the plan.

There is also uncertainty around whether tariffs will slow spending -- the US economy already showed a contraction in the first quarter of the year.

R.AbuNasser--SF-PST