Artificial Intelligence, AWS: What Amazon Investors Are Watching For When E-Commerce Giant Reports Q2 Earnings

Amazon.com, Inc AMZN is set to issue its second-quarter earnings print on Thursday after the closing bell. Investors and analysts are focusing on the company’s efforts in artificial intelligence (AI) in light of this year’s AI boom. Here's what you need to know.

By The Numbers: The Seattle, Washington-based company is expected to issue earnings of 35 cents per share on revenues of $131.49 billion, a jump on a year-over-year basis from a 20-cent-per-share loss on revenues of $121.23 billion.

Wedbush analyst Michael Pachter said the stock’s upside potential is limited, even with a solid second quarter beat. According to Pachter, Amazon is well-positioned to benefit from an uptick in both consumer confidence and corporate spending, but his expectations for further share price appreciation are reserved.

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Several factors, including Amazon Web Services (AWS), will come under close scrutiny after the print.

AWS' growth rate — which contributed nearly 16% to total revenue last quarter — slowed down from 36.5% in the second quarter of 2022 to 15.8% in the first quarter of 2023.

Amazon’s AI initiatives are another key focus area, as the company made several generative AI announcements at an AWS event in New York last week, including new and updated pre-trained large language models to power AI applications.

Monness analyst Brian White said he expects Amazon to deliver a 9% year-over-year increase in sales and beat Street estimates in the second quarter. White is optimistic about the stock, expecting the company’s bottom line to beat analysts' consensus estimates at 41 cents per share.

AMZN Price action: Shares of Amazon are trading 2.29% lower to $128.68, according to Benzinga Pro.

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