Amazon: This Post-Q2 Dip Makes No Sense

Summary

  • Amazon delivered Q2 2025 revenue of $167.7 billion (+13% YoY) and EPS of $1.68 (+33% YoY), beating consensus on both top and bottom lines.
  • AWS revenue grew 17.5% to $30.9 billion, but operating margin fell to 32.9% due to higher stock-based comp, FX, and heavy AI infrastructure investment.
  • Amazon's long-term growth drivers—cloud, AI, automation, and digital ads—remain intact, supporting my continued 'Buy' rating despite near-term margin pressures.
  • Management guided Q3 sales above consensus ($174–$179.5B), highlighting confidence in demand, while FCF remains positive despite elevated capex.
  • I see a 20% upside over the next 12 months, as AMZN stock is likely to exceed earnings forecasts and capitalize on secular tech trends.
  • Looking for a helping hand in the market? Members of Beyond the Wall Investing get exclusive ideas and guidance to navigate any climate. Learn More »
Amazon warehouse facility in Houston, TX.

Brett_Hondow

My Thesis Update

I've been bullish on Amazon.com, Inc. (NASDAQ:AMZN) stock since March 2025, with my most recent article coming out in June 2025, when I argued that AMZN and its tech and robotics investments would start

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This article was written by

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Oakoff Investments is a personal portfolio manager and a quantitative research analyst with 5 years helping readers find a reasonable balance between growth and value by sharing proprietary Wall Street information.

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Analyst’s Disclosure:I/we have a beneficial long position in the shares of AMZN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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