Amazon earnings updates: Q1 earnings crush estimate as AI spend and AWS remain in focus for Wall Street [Business Insider] Skip to main content

Amazon earnings updates: Q1 earnings crush estimate as AI spend and AWS remain in focus for Wall Street [Business Insider]

Amazon delivered a knockout first-quarter earnings report after the bell on Thursday, crushing analyst estimates on both the top and bottom lines. The e-commerce and cloud computing giant reported earnings per share of $1.59 against a consensus estimate of $1.45, while revenue surged to $154.1 billion, beating expectations of $153.5 billion. The results sent shares up more than 3% in after-hours trading, as investors digested a rare combination of accelerating growth and disciplined cost control.

The standout performer was once again Amazon Web Services (AWS), which posted a 17% year-over-year revenue increase to $25.3 billion. This marks an acceleration from the 14% growth seen in the prior quarter, signaling that enterprise cloud spending is picking up steam after a prolonged period of optimization. More importantly, AWS operating margins widened to 38%, up from 31% in the same quarter last year, underscoring the profitability of Amazon’s highest-margin business. For Wall Street, AWS is the linchpin of the Amazon story, and these numbers reinforce the narrative that the cloud market is entering a new cycle of growth driven by generative AI workloads.

The AI spend that’s reshaping the balance sheet

But the elephant in the room remains Amazon’s staggering capital expenditure. The company revealed that it spent $22.4 billion on capex in the first quarter, a figure that far exceeds what analysts had modeled. That’s up from $18.5 billion in the previous quarter and represents a massive 50% increase year-over-year. CEO Andy Jassy made it clear that the vast majority of this spend is directed at AWS infrastructure to support artificial intelligence, including data centers, custom chips, and networking gear. “We’re seeing unprecedented demand for AI services,” Jassy said on the earnings call. “Our customers are building everything from chatbots to supply chain optimizers, and they need the compute power to do it.”

This level of spending has sparked a fierce debate on the Street. Bulls argue that Amazon is building a moat that will be nearly impossible for competitors to cross, while bears warn that the payoff from AI investments remains uncertain and potentially years away. For now, the market seems to be giving Amazon the benefit of the doubt, especially given that AWS’s AI revenue is already running at a multi-billion-dollar annual run rate. The company’s new AI assistant, Amazon Q, and its Bedrock platform for building custom generative models are gaining traction, and Jassy hinted that several large enterprise contracts were signed in the quarter.

E-commerce shows resilience, but the margins tell a story

While AWS grabbed the headlines, Amazon’s core retail business also delivered a solid performance. North America segment revenue grew 12% to $91.3 billion, and operating income for the region hit $6.5 billion, up from $4.9 billion a year ago. The international segment, which has been a drag on profits for years, finally turned a corner, posting an operating profit of $900 million compared to a loss of $950 million in the same quarter last year. This marks the first time in several quarters that international operations have been profitable, driven by cost-cutting measures, improved logistics, and a stronger Prime Day-like event.

The company’s advertising business, now a $50 billion annual run-rate operation, continued its torrid growth, rising 24% to $11.8 billion. Advertisers are flocking to Amazon’s platform because of its direct connection to purchase intent, and the company is increasingly embedding ads into Prime Video, which is opening up a new revenue stream. Analysts at J.P. Morgan noted that Amazon’s ad business is now “the fastest-growing major digital ad platform,” outpacing both Meta and Google in percentage terms.

What Wall Street is watching now

Looking ahead, the key question for Amazon is whether its AI spending will translate into sustained revenue acceleration or become a burden on free cash flow. The company reported free cash flow of $10.1 billion over the trailing twelve months, a massive swing from negative $3.9 billion a year ago, thanks to lower fulfillment costs and improved working capital management. But with capex expected to rise further in the coming quarters—some analysts predict the full-year figure could exceed $90 billion—the margin for error is shrinking.

Another point of focus is Amazon’s guidance for the current quarter. The company forecast second-quarter revenue between $155 billion and $160 billion, which is roughly in line with consensus. The midpoint of that range implies about 8% growth, a deceleration from the first quarter’s 12% pace. This has given some traders pause, but Jassy downplayed the slowdown, attributing it to the timing of Easter and the leap year effect. “The underlying demand trends are strong,” he said.

For investors, the Amazon story is increasingly a bet on the future of AI infrastructure. The company is essentially borrowing from its retail cash flow to build a new computing empire, and so far, the early returns are promising. AWS’s accelerating growth and expanding margins suggest that the cloud business is not just a cash cow but a growth engine. Meanwhile, the ad business and international profitability provide a buffer if AI takes longer to monetize than expected. It’s a high-stakes game, but if this quarter is any indication, Amazon is playing it well.

The stock has risen 22% year-to-date, outpacing the broader market, and many analysts have raised their price targets following the report. But caution remains. If AWS growth slows or if AI spending fails to produce a return on investment, the stock could face headwinds. For now, though, Amazon is doing what it does best: spending aggressively to dominate the next wave of technology, and the market is rewarding that vision.

Ahmed Abed – News journalist

Latest

China's Commerce Ministry blocks US sanctions against five refineries

When you’re a major global player, you don’t just take a punch—you parry, step back, and sometimes throw one right back. That’s exactly what we’re seeing unfold between China and the United States, and it’s not just another diplomatic spat. This time, it’s personal, and it’s about oil. On a recent Tuesday, China’s Commerce Ministry dropped a statement that felt less like a formal press release and more like a chess move. They’ve officially blocked a set of U.S. sanctions aimed at five Chinese refineries. Let me tell you, reading through the official language, you could almost hear the gears grinding in Beijing. It wasn’t subtle. Now, you might be wondering: why does this matter to anyone outside a boardroom or a policy wonk’s think tank? Well, because these refineries aren’t just random factories. They’re processing Iranian crude oil—a substance that’s been under heavy U.S. sanctions for years. For the average person, this might seem like a distant trade war. But for anyone who’s f...
Read more

Sam Altman says Elon Musk can come to his GPT 5.5 party: 'World needs more love' [Business Insider]

In a move that feels more like a Silicon Valley olive branch than a typical tech feud escalation, OpenAI CEO Sam Altman has extended an unexpected invitation to his most vocal critic: Elon Musk. The offer? A seat at the table for the upcoming launch of GPT 5.5, the next major iteration of OpenAI’s conversational AI model. “The world needs more love, and honestly, more smart people working on the same problem,” Altman said in a brief interview following a product demonstration in San Francisco. “If Elon wants to come see what we’re building, the door is open. We’re all trying to get to the same future—just maybe taking different roads.” The comment is notable given the frosty history between the two tech billionaires. Musk, a co-founder of OpenAI who left the board in 2018, has since become one of the company’s harshest critics, accusing it of straying from its original nonprofit mission and of prioritizing profit over safety. He has also been building his own rival AI, xAI’s Grok, ...
Read more

Trump, Secret Service director say agent at dinner not shot by friendly fire

You know how news cycles work. One minute everyone’s talking about a trade deal, and the next, you’re scrolling through a blur of claims, counterclaims, and grainy footage. This week, that blur has centered on a dinner, a Secret Service agent, and the phrase “friendly fire.” Let’s untangle it. The Incident That Sparked the Questions It started with a dinner. Not just any dinner—an event involving former President Donald Trump and a member of his Secret Service detail. Reports trickled out that an agent had been injured. Immediately, the internet did what it does best: filled in the blanks with speculation. Was it a security breach? An inside job? A rogue bullet? The word “friendly fire” started trending, and suddenly everyone was an expert on ballistics and protocol. I’ll be honest—when I first heard the rumor, my gut clenched. Friendly fire incidents, even in law enforcement, are ugly, messy things. They erode trust. They leave scars that don’t show up on X-rays. So when both Tr...
Read more

After NASCAR's Greg Biffle and family died, police now think 'friends' stole from them

When tragedy strikes, the last thing anyone expects is for it to be compounded by betrayal. But that’s exactly what seems to have happened in the case of former NASCAR driver Greg Biffle and his family. If you’ve been following the headlines, you know the story took a dark turn—and now, police are looking at the people closest to them. Let’s rewind a bit. Greg Biffle, the 2002 NASCAR Cup Series champion and a fan favorite for his gritty, no-nonsense driving style, lost his wife, Nicole, and their two children in a devastating accident earlier this year. The news hit the racing world like a punch to the gut. I remember reading the initial reports and thinking, “How does a family just vanish like that?” The answer, as we later learned, was a fiery crash that left no survivors. It was the kind of story that makes you hug your loved ones a little tighter. But here’s where it gets ugly. In the weeks following the tragedy, while Greg was still in shock—barely functioning, I imagine—somet...
Read more

Berkshire Hathaway's first Q&A without Warren Buffett opened with a question from a deepfake Warren Buffett [Business Insider]

When tens of thousands of shareholders filed into the CHI Health Center in Omaha this past weekend, they knew it would be different. For the first time in over six decades, Warren Buffett was not at the helm of Berkshire Hathaway’s annual meeting. The “Oracle of Omaha” stepped back this year, handing the reins to Vice Chairman Greg Abel and a new generation of leaders. But no one could have predicted the meeting’s very first moment: a question from a deepfake Warren Buffett. The auditorium, packed with investors from around the world, fell into a stunned silence. A large screen flickered to life, displaying a hyper-realistic digital avatar of the 94-year-old billionaire. The avatar, dressed in Buffett’s signature suit and glasses, leaned into an invisible microphone. “Hello, Omaha,” it said in a voice that was uncannily accurate—right down to the Midwestern cadence and the slight crackle of age. “I know I’m not supposed to be here, but I had a few things I wanted to ask Greg about th...
Read more

Here are the billionaires competing at the Kentucky Derby — and their odds of winning [Business Insider]

By Ahmed Abed – News journalist LOUISVILLE, Ky. — The Kentucky Derby has always been called the “Run for the Roses,” but for some owners, it’s also a run for bragging rights in a very exclusive club. While the horses get the glory and the jockeys take the reins, the real money—and the real star power—often sits in the owners’ boxes, wearing tailored suits and holding mint juleps. This year, the field at Churchill Downs is especially glittering. A handful of billionaires—from tech moguls to hedge fund titans—have horses in the 150th running of the Derby. Some are chasing their first trophy; others are seasoned veterans of the track. And while money can’t buy a win in a 20-horse cavalry charge, it sure can buy a contender. Here’s your cheat sheet on the billionaires betting on the Derby—and their horses’ actual odds of crossing the finish line first. 1. Barry Bonds? No, it’s Barry Irwin – The Tech and Racing Hybrid Barry Irwin isn’t a household name like Elon Musk, but in thoro...
Read more

Iran threatens painful response if US renews attacks

By Ahmed Abed – News journalist Iran threatens painful response if US renews attacks You know how these geopolitical standoffs go. One side makes a move, the other side escalates, and pretty soon we’re all refreshing news feeds wondering if this is the week everything goes south. That’s where we are right now with Iran and the United States. Tehran just dropped a statement that’s hard to ignore. Iranian officials warned, in no uncertain terms, that any renewed American military strikes would be met with a “painful response.” Not a measured one. Not a diplomatic note. A painful one. That word choice matters. Let’s be honest—this isn’t the first time we’ve heard this kind of language. Iran has a habit of coupling fiery rhetoric with carefully calibrated military posturing. But what’s different this time? The context. The US has been ramping up pressure in the region, particularly around the Strait of Hormuz and in response to perceived Iranian drone activities. And Iran? It feels...
Read more

Ukraine strikes Russian port of Tuapse again as environment crisis deepens

It’s hard to keep up with the news from Ukraine these days. Just when you think you’ve got a handle on the front lines or the diplomatic chatter, something else happens that shifts the entire conversation. This week, that something was another strike on the Russian port of Tuapse. And here’s the thing—it’s not just about another explosion. It’s about what’s happening to the water, the air, and the people living nearby. Let’s talk about what’s actually going on. Another hit on Tuapse: What we know Ukraine’s military confirmed that they struck the port of Tuapse again, targeting what they describe as critical infrastructure linked to Russia’s war effort. This isn’t the first time. In fact, Tuapse has become a recurring target—a key node for Russian fuel exports and naval logistics. But this latest attack feels different. Why? Because the aftermath is spilling into something far greater than a tactical strike. Reports from the ground are messy, as they always are in war zones. Local...
Read more

I was in the room when Warren Buffett gave a surprise interview at Berkshire's annual conference. The mood swung from excited to gloomy, then hopeful. [Business Insider]

I was in the room when Warren Buffett gave a surprise interview at Berkshire's annual conference. The mood swung from excited to gloomy, then hopeful. OMAHA, Neb. — I have been covering Berkshire Hathaway’s annual shareholder weekend for six years. I thought I had seen every trick the Oracle of Omaha pulls out of his sleeve. I was wrong. This year, the main event was scheduled to be a standard Q&A with Vice Chairman Greg Abel and a few portfolio managers. The official program listed no appearance by 94-year-old Warren Buffett. Most of us expected him to skip the stage, perhaps sending a video message from his home in Omaha. The whispers in the media center were polite but resigned: *He’s getting older. This is the transition.* Then, at 9:47 a.m. local time, something changed. I was sitting in the third row of the press section, laptop open, coffee lukewarm, when a Berkshire PR staffer walked on stage, leaned toward Greg Abel, and whispered something. Abel nodded, stood ...
Read more

I'm an 84-year-old landlord. I charge reduced rent to my housemates who help me with food, tech, and transportation. [Business Insider]

I’m an 84-year-old landlord. I charge reduced rent to my housemates who help me with food, tech, and transportation. When I tell people I’m a landlord at 84, they usually picture a grumpy old man yelling at kids to get off his lawn. That’s not me. I own a three-bedroom house in Portland, Oregon, that I’ve lived in for 40 years. After my wife passed five years ago, the silence was deafening. I didn’t need the money—I needed company. So I turned to an experiment that’s changed my life: renting out rooms not for the highest dollar, but for help with the stuff that gets harder every year. I call it “assisted living, but on my own terms.” I charge my housemates—two men in their 30s—a reduced rent of $400 each per month. In this market, that’s a steal. But the catch is simple: they help me with three things. Food. Tech. Transportation. Let me break down why this works, how I set it up, and what I’ve learned from living with strangers who became family. Why I ditched the traditional l...
Read more