From Nasdaq: 2025-04-28 06:30:00

Investors are concerned about Amazon’s exposure to tariffs due to a large portion of its goods coming from China. However, revenue from Amazon Web Services and advertising play a significant role in its profits. AWS, with superior margins, generates a large portion of operating profits, while the ad business contributes substantially to revenue. Despite potential impacts from tariffs, Amazon’s core profits remain strong, making it a solid long-term investment option.

Amazon’s revenue breakdown over the past year shows the significant contributions from its North America, International, and AWS divisions. AWS, although generating 17% of revenue, accounts for 58% of operating profits due to its high margins. Tariffs may affect AWS growth, but the business’s sticky nature and ongoing demand for computing power could mitigate potential slowdowns.

Advertising services have become a key revenue stream for Amazon, making up 15% of total revenue in Q4. Although specific operating margins for this segment are not disclosed, a comparison with companies like Alphabet and Meta Platforms suggests a potential operating margin of 30%. This indicates that a significant portion of Amazon’s profits come from ad services and AWS, rather than direct sales.

A Wells Fargo report suggests that Amazon may be pausing some data center lease commitments, possibly due to client spending conservatism. However, the impact on AWS growth remains uncertain. While a slowdown in advertising due to economic conditions is possible, the need for advertising new products may counterbalance any reductions. Overall, Amazon’s diversified profit sources and strong financial position indicate resilience to potential tariff impacts.

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2. In other news, the United Nations reported a record-breaking number of refugees worldwide, with over 82.4 million people forcibly displaced from their homes in 2020. This marks a 4% increase from the previous year, highlighting the ongoing global refugee crisis and the need for humanitarian aid and support.

3. Climate scientists warned of the increasing threat of wildfires in the western United States, as dry conditions and high temperatures create the perfect storm for fire outbreaks. In California alone, over 600,000 acres have already been scorched by wildfires this year, underscoring the urgent need for climate action to prevent further devastation.

4. On a more positive note, researchers announced a breakthrough in the fight against Alzheimer’s disease, with a new drug showing promising results in clinical trials. The drug, aducanumab, was found to significantly slow cognitive decline in patients with early-stage Alzheimer’s, offering hope for the millions affected by this debilitating condition.



Read more at Nasdaq: Will Tariffs Crush Amazon? Here’s 1 Metric That Says It Will Be Just Fine