As Amazon.com Inc. (NASDAQ: AMZN) prepares to report its fiscal fourth-quarter earnings, all eyes are on how the company navigated the critical holiday shopping season amid ongoing heavy investments in AI infrastructure. With the company having consistently beaten bottom-line estimates in recent quarters, another potential upside surprise could hinge on margin expansion and AWS’ backlog conversion.
Estimates
The Seattle, Washington-headquartered e-commerce behemoth is expected to publish its Q4 earnings on Thursday, February 5, at 4:00 pm ET. Market watchers’ consensus revenue estimate for the quarter is $211.19 billion, compared to $187.79 billion in Q4 FY24. The management’s most recent guidance calls for fourth-quarter sales in the range of $206.0 billion to $213.0 billion. It is estimated that earnings rose 5.4% YoY to $1.96 per share in the December quarter.
Building on last year’s strong momentum, Amazon’s stock has climbed approximately 6% year-to-date, edging closer to the record highs set three months ago. The company’s robust fundamentals—driven by growth in AWS, resilient retail operations, and disciplined cost management—continue to attract investors. Despite its size, AMZN trades at a valuation that remains compelling compared to peers. Analysts remain optimistic, with recent target prices pointing to as much as 21% upside in 2026, underscoring confidence in the company’s long-term trajectory.
Broad-based Growth
In the September quarter, Amazon’s sales rose sharply to $180.2 billion from $158.9 billion in the prior-year period. Online sales rose 10% annually, while physical store sales rose 7%. As a result, Q3 net income climbed to $21.2 billion or $1.95 per share from $15.3 billion or $1.43 per share a year earlier. Earnings exceeded analysts’ estimates. Revenue growth for Amazon Web Services accelerated to 20.2% YoY.
“Looking ahead, we see further opportunity to improve productivity in our global fulfillment and transportation network. We will continue to improve inventory placement to drive down distance traveled and touches per package. We will also build on the gains from our regionalized network through algorithmic improvements, as well as launching robotics and automation. Operating margin may fluctuate quarter-to-quarter; we have a deliberate approach to achieve sustained progress over the long term,” Amazon’s CFO Brian Olsavsky said in the Q3 FY25 earnings call.
Updates
In the second round of layoffs in three months, Amazon recently announced plans to eliminate 16,000 jobs worldwide as part of its efforts to streamline the organization and reduce bureaucracy, besides leveraging artificial intelligence for greater efficiency. Meanwhile, Amazon Web Services has signed an agreement with Nationwide Building Society, the world’s largest building society, to accelerate innovation and improve customer experience.
The average price of Amazon’s stock for the last 52 weeks is $218.56. It was trading up 2% on Monday afternoon, after opening the session at $238.31.