The news: Amazon shrugged off tariff concerns in its Q2 earnings report, after posting growth ahead of expectations.

• Amazon’s net sales rose 13% to $167.7 billion, beating forecasts for $162 billion.
• The retailer overdelivered on earnings per share, which at $1.68 considerably exceeded the LSEG consensus estimate of $1.33.
• Advertising revenues surged 23% YoY, well ahead of expectations for 17% growth.

But the retailer’s Q3 forecast was murky, suggesting that while consumer demand remains resilient, uncertainty from tariffs and trade policy—along with extensive investments in AI—could weigh heavily on its bottom line.

• Amazon expects net sales of $174 billion to $179.5 billion, ahead of the $173.1 billion analysts were looking for.
• Once again, it offered a broad profit range for the current quarter of between $15.5 billion and $20.5 billion—implying anywhere from an 11% drop to an 18% gain.

Ecommerce advantage: Like fellow ecommerce operators Etsy and eBay, demand on Amazon’s marketplace has been resilient, with online store sales rising 11% YoY in Q2. That could be a sign that deal-hunting shoppers are turning to ecommerce more to uncover deeper discounts.

• 70% of US adults believe they can find better discounts online, according to the July edition of Ipsos’ Consumer Tracker.
• At the same time, fewer in-person shoppers are finding deals: Just 38% agreed that they were seeing more sales in stores recently, compared with 48% in June 2024.

Amazon’s pricing challenge: Whether shoppers can find those discounts on Amazon is another question. A Wall Street Journal analysis found that prices on Amazon for an array of low-cost essentials like deodorant, pet care items, and cleaning supplies were 5.2% higher in July than they were in January.

• While Amazon vigorously disputed those findings, it is still the case that Walmart’s prices for the same items fell by nearly 2% in the same period—which could hurt Amazon’s chances of strengthening its grip on deal-seeking shoppers.
• Amazon’s ability to keep prices low may be hampered by the fact that many of its sellers source goods from China and other international markets, leaving them highly exposed to tariffs—and less inclined to offer discounts, even during marquee events like Prime Day.

Still, few retailers can challenge Amazon’s value proposition, which is built not just on low prices but also on its large assortment and fast delivery guarantee.

• That value proposition is driving shoppers to order more groceries and other essentials from the retailer.
• More—and longer—sales events are helping to burnish Amazon’s reputation for deals, although its decision to double Prime Day’s length opened the door for retailers like Walmart to bolster their share of the July sales season.

Our take: Amazon’s strong quarter and Q3 sales guidance help dispel some fears about the health of the consumer. But its decision to once again offer an unusually broad profit range for the next quarter shows considerable uncertainty about the impact the Trump administration’s trade policies will have on retailers’ costs.