"There were plenty of moving parts at play in recent months. One company that exemplifies both the ongoing challenges and opportunities is Amazon . On one hand, there's the continuing uncertainty related to the long-term impact of tariffs, which could ultimately be a drag on the company's online retail business. On the other, the ongoing adoption of artificial intelligence (AI) could be a catalyst for Amazon Web Services (AWS) -- the company's cloud computing segment -- and its fast-growing digital advertising business."
"In the second quarter, the company cited the inherent unpredictability it faced, specifically calling out tariffs as one factor that could "materially" impact its quarterly results. Amazon's third-party merchants generate 62% of unit sales, and 24% of the company's revenue comes from seller fees. Many of these goods are imported from China, and there were threats of 100% tariffs on Chinese imports as recently as last week, which could potentially take a bite out of Amazon's results."
Amazon faces significant uncertainty from tariffs that could weigh on its online retail business. Third-party merchants account for 62% of unit sales and seller fees generate 24% of revenue. Threats of 100% tariffs on Chinese imports create potential downside for retail results. Concurrently, artificial intelligence adoption could accelerate Amazon Web Services (AWS) growth and boost digital advertising revenue. Management indicated second-quarter results were not materially affected by tariffs, with net sales rising 9% year over year to $166.7 billion. Approximately 61% of revenue is tied to digital sales, highlighting exposure across retail and digital segments.
Read at The Motley Fool
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