Bloomberg Businessweek Instant Reaction: Amazon Gives Weak Forecast on Trade Concerns
May 1, 2025
Caroline Hyde, co-host of Bloomberg Technology, dives into Amazon's recent profit forecast that disappoints and reflects mounting tariff concerns. She discusses how these trade policies may influence consumer spending and affect small businesses relying on the platform. The conversation also touches on Amazon Web Services' slower growth and the challenges of rising costs, urging a rethink of supply chains and pricing strategies. As trade tensions persist, Hyde analyzes potential shifts in consumer behavior ahead of the holiday season.
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Amazon's Profit Forecast Miss
- Amazon's forecast operating income misses expectations mainly due to higher costs and tariffs impacting margins.
- The company faces pressure to absorb tariff costs or pass them to consumers while maintaining competitiveness.
Tariffs Squeeze Amazon's Margins
- Amazon's profit pressure comes from infrastructure costs, tariffs, and advertising impacts, balancing maintaining consumer loyalty.
- AWS strength supports margins but retail must absorb tariff-related hits to keep prices attractive.
Tariffs Impact Hidden in Guidance
- Amazon acknowledges tariff-related cost pressures despite avoiding direct commentary on tariffs in their release.
- Negotiations on tariff impacts are ongoing with suppliers, but transparency on cost impact remains limited.