Amazon's revenues beat second quarter expectations, but were not enough to calm investors' concerns about AI competition and weak profit guidance.
On Thursday, the e-commerce giant reported net sales of $117.7 billion and revenue of $1.68 per share, hampering analysts' estimates.
Despite strong results, the company's shares fell 7% in after-hours trading. Investors were surprised by Amazon's third quarter profit outlook, with operating profits projected between $15.5 billion and $20.5 billion against Wall Street's estimated $194.1 billion.
Here's where Amazon is in the AI race to compete with Starlink Ours Four important takeouts from the second quarter revenue call.
1. To date, the impact of tariffs is limited
CEO Andy Jussy said tariffs had not had a significant impact on the business so far in 2025. He cited the strong Prime Day sales, which was July after the second quarter was wrapped up, as evidence that consumer demand was resilient.
In its revenue call, Jassy said the company has not seen a “decreased demand” or “meaning prices” so far, but he said it could change later this year.
He added that in an analyst questioning session it is still unclear “who will absorb the higher costs.”
Jassie also pointed out Amazon's 2 million third-party sellers as an important advantage. This often offers a more flexible price.
“The tariffs appear to be exaggerated for now Amazon Brent Thill, senior technology research analyst at Jefferies, wrote in a recent note before earnings.
2. Elon Musk's competition with Starlink
Jassy said that the satellite-based broadband internet race is a predominantly two-player game between Amazon's own project Kuiper, “the incumbent” (who is widely understood as a star link to Musk.”
With the revenue call, Jassy says to investors, price is a key differentiator for Kuiper, and it also has existing relationships between Amazon and corporate and government clients, many of whom are also interested in providing AI.
While Kuiper faced delays, Jassy said services are on track to enter commercial beta later this year or early 2026.
In April, Amazon sent the first batch of 27 Kuiper Internet Satellites into low Earth orbit. At least 54 crafts are on track. Amazon plans to mark 3,236 satellite constellations.
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3. Excitement around Alexa+
Amazon has promoted Alexa+, an AI-enabled voice assistant that was released in February.
“She's much smarter than her previous self,” Jassie said of improvements to her previous version of Alexa. “She's much more capable and unlike the other chatbots there today, she's good at answering questions, but she'll say she can't actually take any action for you.
Some examples of what Alexa+ can do include playing music, moving music between devices, drawing curtains, turning on lights, and changing the temperature of the thermostat.
Millions of customers have been given early access to Alexa+, and Jassy told the phone that the feedback was “very positive.”
Jassy also said that Alexa+ could incorporate advertising or subscription elements in the future.
4. Jassie was asked if AWS was behind in the AI race
Jassy faced tough questions about how AWS is fighting its competition with its cloud computing rivals.
Morgan Stanley analyst Brian Novac asked Jacee to distribute to his competitors the Wall Street story of “AWS being behind” in a generative AI race.
Jassy said it was “fast” in the AI field and the industry was “top heavy.” He said he didn't directly address how AWS responds to its competitors, but he believes the company is positioned well as its adoption grows.
“Remember, 85% to 90% of global IT spending is still on the premises. If you believe the equation will turn over, then I do that, and we have a lot of legacy infrastructure that you have to move,” Jassy says.
