Mag 7 earnings season kicked off last week, and Tesla (TSLA) posted a series of mixed numbers. Scant updates on the near-term outlook hurt sentiment and the stock closed in the red. This week, we’ll get September quarter earnings from Apple (AAPL), Amazon (AMZN), Alphabet (GOOG) (GOOGL), and Microsoft (MSFT).
With year-to-date gains of about 3.4%, Amazon is the worst-performing “Magnificent 7” stock in 2025. Amazon stock has been stuck in a tight range since mid-May and hasn’t really participated in the recent rally over the period since it catapulted the broader markets to record highs. In this article, we will analyze Amazon’s earnings estimates for the third quarter of 2025 and examine whether the report can turn the tide for the e-commerce giant.
Analysts expect Amazon to post revenue of $177.7 billion in the third quarter, up 11.9% year over year. During the second quarter earnings, the company posted third quarter revenue between $174 billion and $179.5 billion, implying year-over-year growth of between 10% and 13%. Consensus estimates call for Amazon’s third-quarter earnings per share (EPS) to rise 9.8% to $1.57. Amazon does not provide guidance on earnings per share, but management indicated third-quarter operating income would be between $15.5 billion and $20.5 billion.
This is what I’ll be watching on Amazon’s third-quarter earnings call.
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Christmas Spending Outlook: I’ll be keeping an eye on Amazon’s comments on sales prospects for the holiday season amid reports of stress among low-income households.
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Grocery strategy: I will be attentive to any comments on the company’s feeding strategy. Amazon has been expanding its same-day grocery service in the US and internationally and has also created its private label grocery brand. At the same time, it announced last month the closure of all Fresh stores in the UK. Groceries could be a key driver of Amazon’s growth, and I’ll be keeping an eye on any new initiatives the company is taking to grow that business.
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AWS and AI initiatives: Amazon’s enterprise-focused Amazon Web Services (AWS) has been losing market share, and during the third-quarter earnings call, I’ll be keeping an eye on the outlook for that business, which remains the company’s cash cow. The company could also talk about the recent AWS outage, which took down several websites and applications around the world. On a similar note, I think Amazon could introduce more artificial intelligence (AI) initiatives. The company has missed the recent AI rally, even as it is among the key AI bets.
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Increase in preferential price: Amazon recently borrowed a leaf from Netflix’s (NFLX) playbook and announced a crackdown on password sharing on Prime. During the third quarter earnings conference call, I will be watching for any discussion of the Prime price increase. The company hasn’t announced a price increase since 2022, and we could see an increase sometime next year, which could add billions of dollars to Amazon’s top revenue. Amazon could also face questions about its live events strategy, as streaming rivals such as Netflix and Disney (DIS) are doubling down on that segment.
