Every quarter, corporate America whose companies are on the stock exchange report their quarterly earnings. The CFO has worked overtime to ensure the results are in place and to meet the expectations of analysts all over the world. The more valuable the company, the more analysts who spend time and effort to determine what the company should be earning. The analysts raise expectations both for the company, the industry and the market reacts. For some companies it is relatively easy to determine what they should be earning, so expectations are important.

In an article by Deborah Mary Sophia and Greg Bensinger of Reuters, Amazon reported a profit which is good, but not beating expectations of the rest of the industry. Amazon for the past few years, the biggest profit area of 60% was AWS or Amazon Web Services. AWS profit margins fell from 39.5% to 32.9% in the first quarter versus 35.5% a year ago. The AWS reported a 17.5% increase to $30.9 billion edging past expectations of $30.77 billion. However, the competition of Microsoft’s Azure rose 39% and Google Cloud gained 32%. The issue revolves around will Azure overtaken AWS as market leader.

Amazon expects total net sales to between $174 billion to $179.5 billion, compared with analyst’s average estimate of $173.08 billion.

A concern of analysts is while Amazon has poured billions of dollars into AI infrastructure, is the lack of a strong AI model from AWS is causing concerns the company could be trailing rivals in AI development.

The retailer posted online store sales of $61.5 billion, an 11% gain. Advertising sales were up 23% to $15.7 billion.

Linking to dividend paying stocks, profitable companies often continue to report profits every year but do they meet expectations of growth? Companies are valued on great number of statistics and projections of where they will be the future, no one knows for positive, so expectations play a role in deciding alternatives.

There are more questions than answers, till the next time – to raising questions.