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Amazon announced strong sales and profit growth in the second quarter as it shrugged off fears that Donald Trump’s tariff policies could weigh on earnings and continued its artificial intelligence drive.
The Seattle-based group’s revenues rose 13 per cent year over year to $167.7bn in the three months to the end of June, a period of uncertain trading after the US president in April began a relentless series of tariff announcements and trade deals.
Revenue for the quarter came in better than analysts’ estimates of $162.2bn, according to a S&P Visible Alpha survey.
However, its shares fell as much as 4 per cent in after-hours trading due to underwhelming guidance for the third quarter.
Amazon said that it expected revenue for Q3 to be between $174bn-$179.5bn, only slightly above analysts’ expectations of $173bn.
“Our conviction that AI will change every customer experience is starting to play out,” said Andy Jassy, chief executive of Amazon. “Our AI progress across the board continues to improve our customer experiences, speed of innovation, operational efficiency, and business growth.”
Net income for the second quarter was stronger than expected, rising 35 per cent to $18.2bn from the year before.
Amazon Web Services, the division that provides cloud computing services and operates data centres, reported a 17.5 per cent increase in sales to $30.9bn, which was in line with Wall Street expectations.
Amazon is competing with other large technology companies including Microsoft, Google and Oracle to service demand for cloud infrastructure. These companies are directing significant resources to building data centres, which can be used to train and run AI models.
Jassy said earlier this year that Amazon would spend more than $100bn on AI initiatives during the 2025 fiscal year.
Amazon is navigating an ever-changing tariff regime and uncertain economic environment as it pushes ahead with these investments.
Analysts at Deutsche Bank previously said that Amazon had been buoyed by a resilient consumer backdrop and delays in the introduction of steep tariffs which continue to be “kicked down the road” by the White House.
The ecommerce giant has also benefited from the removal of the so-called de-minimis exemptions that enabled Chinese online retailers such as Temu to ship low value goods directly from China without paying duties.
Amazon has joined rivals plotting lay-offs as they seek to allay concerns from some investors that significant AI investment has yet to deliver the productivity gains that executives have heralded when marketing the technology.
“We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs,” Jassy told employees in a recent memo. “It’s hard to know exactly where this nets out over time, but in the next few years, we expect that this will reduce our total corporate workforce.”
