Wall Street appears mostly confident that Amazon can hit its marks for its first-quarter results due Thursday. The trickier question for Amazon stock is what comes after that.
Analysts are sizing up how and when Amazon's massive digital storefront could feel the hit of the U.S. and China trade war. Amazon stock is down 15% this year and 5% since April 2's "Liberation Day", when President Donald Trump announced his broad tariff plan. President Trump has paused some of those tariffs – helping Amazon and other stocks recoup some losses in recent trading days – but major levies on Chinese goods are still in place. Amazon stock was down 1.7% at 185.81 in recent action on the stock market today.
"Close to 50% of all sellers on Amazon.com are based in China," William Blair analysts Dylan Carden and Arjun Bhatia cautioned investors late last week. "U.S. sellers make up most of the balance but sell mostly goods coming out of China. Assessing the potential risk of the current 145% tariff on Chinese goods is nearly impossible in that it would create a deep structural fissure in the business."
Amazon's e-commerce business relies on "broad availability" of affordable goods it can deliver quickly, the William Blair analyst note said. And that model helps power businesses like Amazon Prime, advertising sales and third-party e-commerce fulfillment services. Tariffs are a risk to both the price and depth of Amazon's offerings, in the analysts' view
"It is not simply about selling the same item at like or lower prices with better convenience," the note said. "If the model is for any reason starved of breadth, it creates problems deeper into the more profitable parts of the business, which we believe are damaging and hard to game out."
Amazon's Tariff Impact
William Blair offered that warning as part of its forecast for Amazon's operating margins in 2025 and 2026. Carden and Bhatia also reiterated their outperform rating for Amazon stock. That call reflects their view that the tariffs will likely be reversed in some capacity.
"While we think upside is limited as long as China tariff threats loom, our SOTP (sum-of-the-parts) analysis supports value for shares around $260-$270, or close to 40% potential upside," the analysts said. "We believe the largest risk here remains any prolonged negotiations with China and certainly any structurally higher tariffs that might be left in place longer term."
The William Blair note reflects the challenge for investors to size up Amazon's value amid the tariff uncertainty. Analysts were near universally bullish on Amazon heading into 2025, citing AI's value to its cloud business and improving profitability for its e-commerce operations.
Since the tariffs kicked in this month, Amazon's financial performance through March may prove a side note.
"Overall, we think investors will be less focused on Q1 2025 results and more focused on Q2 2025 and the longer-term outlook given tariff risks and a slowing macro environment," CFRA analyst Arun Sundaram wrote in a client note last week.
Amazon typically provides a revenue and operating income guide for the current quarter when it release results. Analysts will also likely be listening for updates to Amazon's capital expenditures plan. Chief Executive Andy Jassy earlier this month defended the company's plan to invest $100 billion in capex this year.
"We acknowledge 2Q and (second half of 2025) revenue uncertainty (retail, ads and cloud), but remain confident on Amazon's ability to take share in e-commerce, improve retail margins via headcount cuts, and benefit from cloud AI demand," BofA Securities analyst Justin Post told clients Monday.
Amazon Stock Retakes 21-Day Moving Average
With gains late last week, Amazon stock closed trading Thursday and Friday above its 21-day moving average. Before that, the company's shares had not closed a trading day above the short-term trendline since March 27, according to MarketSurge charts by Investor's Business Daily.
Shares remain well below Amazon's longer-term 50-day and 200-day trendlines, however.
The current slump for Amazon stock began with its fourth-quarter results in early February, which beat earnings estimates but included a lower-than-expected sales forecast for Q1. Shares have tumbled 23% from a record high of 242.52 reached Feb. 4.
