Amazon Q4 2024 Earnings On Tap: What Big Tech Investors Need to Watch

TradingKey - In the cloud computing space, the biggest company out there is none other than Amazon.com Inc (NASDAQ: AMZN). Investors might also be forgiven for forgetting that Amazon has an enormous e-commerce business that it also runs, as well as a burgeoning online ads business.

With all three revenue generators doing well, and Artificial Intelligence (AI) proving to be a boon for Amazon’s cloud business, investors are keenly awaiting Amazon’s latest Q4 2024 results.

The company is set to report its latest earnings on Thursday (6 February) after the market closes. Here’s what investors should be watching heading into the latest numbers for this tech giant. 

Can Amazon deliver on the top and bottom lines?

Investors have relatively high expectations heading into this earnings print for Amazon. Revenue for the e-commerce and cloud giant is expected to increase 10% year-on-year to US$187.3 billion in what’s traditionally a stronger fourth quarter due to the holidays.

Average analyst estimates are also projecting earnings per share (EPS) to rise 48% year-on-year to US$1.49.

In Q3 2024, Amazon surprised on the upside with a blowout operating profit of US$17.4 billion – well above the US$14.7 billion that was expected.

Of course, whether Amazon can deliver again on the bottom line will be in large part due to how well its AWS cloud computing service performs. It did well in Q3 2024, notching up 19% year-on-year revenue growth and hitting US$27.5 billion in sales.

Expectations for Q4 2024 are similarly high with analysts expecting a slight acceleration to around 20% year-on-year revenue growth for AWS. Meanwhile, operating income is expected to hit US$19 billion during the period.

Tariffs and capex on the menu

In the more immediate term, on the retail side of Amazon’s business, there’ll be a focus on how much of an impact President Trump’s tariffs may have on its business.

Of course, President Trump suspended an exemption on imports valued under US$800 into the US from China, meaning lower-value e-commerce goods will be hit. This exemption had allowed e-commerce firms to send goods straight to Americans from Chinese merchants.

While it is surely a negative for the overall e-commerce sector, Amazon looks likely to weather the headwinds given its low-price focus and a massive third-party marketplace that taps into various geographies in terms of merchant origin.

As with other cloud giants, Amazon’s capital expenditure (capex) plans will also be a focus as the recent DeepSeek news caused a scare for investors – who believe spending plans could change among large cloud providers if a drop in demand is seen.

In Q3 2024, Amazon saw its capex spend surge over 80% year-on-year to US$22.62 billion and CEO Andy Jassey says the company will spend more on capex in 2025 versus an expected US$75 billion for the whole of 2024. Investors will want to see a return on that investment in the foreseeable future.

 large, maybe once-in-a-lifetime opportunity”. As a result, he went on to say that shareholders will “feel good about this long term, that we’re aggressively pursuing it”.

Ads to be a continued bright spot?

Finally, Amazon’s online advertising business is becoming a giant in its own right. In Q3 2024, the firm’s online ads business expanded by 19% year-on-year to rake in US$14.3 billion in revenue.

The company is starting to break into the digital advertising space given its massive presence in the e-commerce space and valuable “real estate” that its app ecosystem occupies. According to Emarketer, Google currently has a near-28% share of worldwide digital advertising , followed by Meta Platforms Inc (NASDAQ: META) with 22.8% and with Amazon now in third with 8.8% share.

That growth runway is clearly still there for Amazon’s ads business and investors will be hoping that the company can outperform its 19% online ads growth rate in Q3 2024 come Thursday’s earnings.