Amazon reports Q4 2025 results today after market close. Wall Street consensus expects $1.97 EPS on $211.4 billion in revenue. If history is any guide, those numbers are too low.
The Pattern Wall Street Can't Break
Over the last 11 quarters, analysts have underestimated Amazon's EPS by an average of 24%. Not a typo. Nearly a quarter of the actual result, missed consistently.
| Period | EPS Consensus | EPS Actual | Miss % |
|---|---|---|---|
| Q3 2025 | $1.57 | $1.95 | 24% |
| Q2 2025 | $1.33 | $1.68 | 26% |
| Q1 2025 | $1.37 | $1.59 | 16% |
| Q4 2024 | $1.49 | $1.86 | 25% |
| Q3 2024 | $1.14 | $1.43 | 25% |
Revenue forecasts are tighter — just 1.3% average error. Analysts can model sales. What they can't model is Amazon's relentless margin expansion: AWS efficiency, advertising growth, fulfillment optimization. The machine keeps finding leverage they don't expect.
What Tonight's Numbers Might Actually Look Like
If the pattern holds:
- Consensus EPS $1.97 → Actual likely $2.35-2.45
- Consensus Revenue $211.4B → Actual likely $212-215B
- AWS Revenue → Watch for $35B+ and 21%+ YoY growth
A beat on these numbers is practically priced in. The stock dropped 4-5% today ahead of the print. Smart money knows the beat is coming.
The Real Question: What Does Jassy Say Next?
Here's where it gets interesting. Amazon has a pattern:
- Beat earnings → Stock pops
- Guide cautiously → Stock gives it back
This happened in Q1, Q2, and Q3 of 2025. Strong results, conservative guidance citing AI capex, tariffs, FX headwinds. The market wants to know: is $125 billion in 2025 infrastructure spend the peak, or just the beginning?
Bull case: Jassy says 2026 capex moderates while AI workloads monetize. AWS reaccelerates. Operating margins expand toward 12%+.
Bear case: "We're accelerating investment because the AI opportunity is generational." Translation: more spend, returns TBD. Stock sees that 8% downside the options market is pricing.
What We're Watching
- AWS growth rate — 21% is the whisper. Below 20% and Microsoft/Google narrative takes hold.
- 2026 capex guidance — $125B again? Higher? Any hint of moderation?
- Operating margin — 11.7% expected. Expansion = good. Compression from AI spend = concern.
- Free cash flow commentary — FCF is what matters for Rule of 40. How's it trending?
The Bottom Line
Amazon will almost certainly beat tonight. They always do. The question is whether the guidance finally gives investors permission to pay up for the AI infrastructure buildout, or whether we get another "great quarter, cautious outlook" that sends the stock sideways.
Results drop after 4pm ET. Conference call follows.
Position disclosure: This is analysis, not investment advice. We track Amazon as one of 28 stocks on R40.
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