Tech giant Amazon (AMZN) is scheduled to release its Q1 2025 financial results on May 1. Wall Street analysts expect the company to report earnings of $1.36 per share and revenues of $155.02 billion. Ahead of the Q1 print, Jefferies analyst Brent Thill said that Amazon’s cloud unit, Amazon Web Services (AWS), remains the “crown jewel,” growing faster than the rest of the business and maintaining sky-high margins. However, he lowered his price target on Amazon to $240 from $250, citing macro and tariff concerns.
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It is worth noting that Thill ranks 987 out of more than 9,437 analysts tracked by TipRanks. He has a success rate of 50%, with an average return per rating of 5.90% over a one-year timeframe.
Thill’s Views Ahead of Q1 Print
Heading into Amazon’s Q1 earnings report, Thill flagged ‘macro and tariff risks,’ especially on Chinese imports, as key near-term threats. As a result, he trimmed Amazon’s Q2 and FY25 revenue projections by around $2 billion and $10 billion, respectively. Also, Jefferies estimates Amazon’s earnings before interest and taxes (EBIT) to be 11% and 5%, below the consensus, for the same periods.
On the bright side, Thill sees AWS as Amazon’s strongest asset, growing faster than the rest of the business and delivering the highest operating margin at 37.0%, well ahead of the company’s other segments. He sees cloud revenue staying strong, helped by AI tailwinds and potential capacity expansion.
According to Main Street Data, AWS generated revenue of $28.8 billion in Q4 2024, marking a growth of 19% year-over-year. For the full year also, AWS segment sales climbed 19%, reaching a total of $107.6 billion.
Meanwhile, Thill believes that Amazon’s ads business still has a lot of room to grow. He notes that Amazon has yet to fully tap into its retail data or its growing base of ad-supported Prime Video viewers. Also, he believes that the recent stock pullback gives investors a more “attractive” long-term entry point.
Is Amazon Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AMZN stock based on 37 Buys and one Hold assigned in the past three months, as indicated by the graphic below. Furthermore, the average AMZN price target of $250.45 per share implies 49.68% upside potential.
