'Gaining share': Here's what Wall Street expects from Amazon's 2nd-quarter earnings

"There are some signs of consumer softening, but we think Amazon is gaining share," Bank of America said in a recent note.

• Amazon will report its second-quarter earnings after the market close on Thursday.
• Investors expect solid growth in Amazon's AWS cloud unit, as well as its massive retail operations.
• Detailed below is what Wall Street expects from Amazon's upcoming second-quarter earnings report.

Amazon will report its second-quarter earnings results on Thursday after the market close, and all eyes are on the company's AWS cloud business.

Wall Street expects the retail giant to report adjusted earnings per share of $1.47 in the quarter and revenue of $148.78 billion, according to data from Bloomberg.

Top of mind for investors will be any commentary on Amazon's recent Prime Day sales event, as well as the growth rate of its advertising business and whether its AWS cloud unit is still the leader in the space.

Here's what Wall Street expects from Amazon's upcoming second-quarter earnings report.

Bank of America: Amazon's retail unit is gaining share

Bank of America expects Amazon to produce a solid earnings report on Thursday, with the bank expecting both a revenue and income beat, as well as faster-than-expected growth in its AWS cloud unit.

"Given beat in 1Q, new third-party fees, Prime ad ramp and limited fulfilment center square foot growth, we expect upside toward buyside expectations," Bank of America said in a recent note.

The bank said the biggest risk for Amazon is its third-quarter profit margin guidance because Wall Street already has high expectations, and higher freight costs could serve as a headwind.

While the US consumer is showing signs of softening, the bank expects Amazon's retail unit to be a beneficiary from the current economic environment.

"There are some signs of consumer softening, but we think Amazon is gaining share," Bank of America said.

And while Amazon's stock multiple has expanded, the bank still sees upside potential.

"Given expanding retail margins with support from Prime ad growth, and expected AWS acceleration, we think the stock is still set up for multiple expansion in 2024," Bank of America said.

Bank of America rates Amazon with a "Buy" and a $220 price target.

Citi: 'Improving AWS demand and expanding profitability'

Citi said Amazon is set to benefit from multiple tailwinds as demand for its AWS cloud services improves and it expands its profitability.

"Given GenAI tailwinds we believe AWS revenue growth likely accelerated in 2Q and based on improving efficiencies across Retail along with continued strong advertising demand, we believe OI is likely to be above the high-end of guidance," Citi said in a recent note.

The bank said that while there are signs of a "more challenged" low-end consumer, Amazon's delivery improvements should result in solid retail sales.

"Faster delivery has improved conversion rates and our analysis of Prime Day suggests another successful event," Citi said.

Here's what Citi will be looking for on Amazon's earnings call:

"During earnings, we'll be listening for AWS demand, the results from the May Upfronts, Prime Video demand, and thoughts on its newly signed NBA streaming rights, international profitability, capex, and any insights on capital returns as margins ramp," Citi said.

Citi rates Amazon with a "Buy" and a $245 price target.

Goldman Sachs: 3 key things to watch for in Amazon's Q2 earnings

Goldman Sachs highlighted three key investor debates that will be ongoing as Amazon reports its second-quarter results.

Those three things are:

1. "The overall health of the consumer — Amazon's eCommerce business appears to have remained strong in Q2 based on a host of industry checks and data points intra quarter."
2. "The ability of Amazon to continue to produce Operating Income margin upside — a topic we delve into greater detail in the note and still see the potential for outperformance in 2025 driven by higher retail margins and a stronger contribution of advertising — we also maintain a positive long-term view on Intl margins and expect AWS profitability to remain robust."
3. "The trajectory of AWS revenue growth, where we continue to expect reacceleration through 2024 as prior headwinds around optimization and workload migration turn into tailwinds and AI workloads are a rising tailwind."

Goldman Sachs rates Amazon with a "Buy" and a $250 price target.

JPMorgan: 'Expect AWS acceleration'

JPMorgan said in a recent note that investor discussions reveal the top areas of focus to be the potential for accelerated growth in Amazon's AWS cloud unit.

"Investor discussions focused on AWS acceleration, GenAI positioning, pace of North America OI margin expansion, health of the consumer, and magnitude of FCF and potential capital returns," JPMorgan said.

The bank, which calls Amazon a "Best Idea," said investors are looking for Amazon to deliver between $148 billion and $150 billion in revenue, and AWS unit growth of 17% to 18% in the second quarter.

"We expect AWS acceleration and solid Stores growth, North America and International OI margin expansion, and improved cost discipline to support multi-year FCF ramp," JPMorgan said.

JPMorgan rates Amazon with an "Overweight" and a $240 price target.

Bloomberg Intelligence: 'Double-digit sales gains may stay intact'

Analysts at Bloomberg Intelligence expects Amazon's second-quarter sales to rise towards the high end of its 7% to 11% guidance range thanks to strong e-commerce sales, ongoing advertising gains and continued growth in Amazon's AWS cloud division.

"AWS sales, in constant currency, may meet consensus' high-teens view," Bloomberg Intelligence said.

Amazon should also see some solid growth in its retail division, according to the note.

"On the retail side, the company's personal-shopping assistant Rufus and other gen-AI enhancements, coupled with third-party sales outpacing first party, are catalysts," Bloomberg Intelligence said.

The analysts also said Amazon's advertising revenue could continue to grow at a "20%-plus pace as Amazon takes market share."