Amazon's shares dropped on weak Q1 revenue forecast, but company's AI optimism drives investment plans.

From Nasdaq: 2025-02-11 04:05:00

Shares of Amazon (NASDAQ: AMZN) dropped after disappointing first-quarter revenue forecast, despite the company’s optimism about AI. Amazon plans to invest heavily in AI this year, with $100 billion in capital expenditures. In Q4, AWS revenue grew 19%, and North American sales increased by 10%. Operating income surged in both segments.

Amazon’s revenue rose by 10% to $187.8 billion, exceeding analyst expectations. Adjusted EPS increased by 86% to $1.86. The company generated $115.9 billion in operating cash flow and $38.2 billion in free cash flow. Q1 revenue forecast of $151 billion to $155.5 billion fell short of analysts’ expectations.

While Q1 guidance was soft, Amazon remains committed to AI investment. The company’s e-commerce operations continue to grow, and its ad business is thriving. With a forward P/E ratio of about 30 times 2025 estimates, Amazon appears attractively valued. Long-term investors may see the stock dip as a buying opportunity.



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