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Amazon’s AMZN North America segment continues to be the backbone of its business, playing a critical role in driving overall growth. With strong consumer demand, wide product selection and an expanding seller network, the region is helping Amazon maintain its leadership in e-commerce.
In the first quarter of 2025, Amazon’s North America segment (59.7% of total revenues) generated $92.9 billion in revenues. The segment saw an 8% year-over-year growth, reflecting strong performance despite economic uncertainties. Our model estimate for second-quarter 2025 North America revenues is pegged at $97.2 billion, indicating year-over-year growth of 7.9%.
To support this growth, AMZN is continuing to improve its fulfillment network across the region. The company has redesigned its inbound network to better distribute inventory across its regions, which allows it to place products closer to customers. This has helped reduce delivery times, lower the cost to serve and increase the likelihood that multiple items in a customer’s order arrive together. In the first quarter, Amazon achieved its fastest-ever speeds for same-day and next-day deliveries, helping it maintain a lead in convenience.
Looking ahead, Amazon is expanding its use of automation and robotics in its operations, continuing to build out its same-day delivery network and adding more delivery stations in rural areas in the United States. These steps are aimed at reducing handling costs, improving speed and expanding reach. The company is also focused on offering low prices and great value, which remains especially important for customers given broader economic uncertainty. Together, these efforts are central to Amazon’s strategy to drive continued growth in the North America segment.
As Amazon sharpens its focus on the North America segment, competition from major retailers like Walmart WMT and Target TGT is intensifying.
Walmart remodeled 40 U.S. stores in the first quarter of fiscal 2026, improved three-hour delivery coverage to 93% of U.S. households and saw a 21% jump in U.S. e-commerce sales. Additionally, Walmart has undertaken several initiatives to enhance e-commerce operations in the region, including buyouts, alliances and improved delivery and payment systems.
Target is strengthening its position in North America by combining digital expansion with store investments. Target has an outstanding pipeline of new stores and is committed to ongoing remodels of existing locations. Additionally, it has been ramping up its digital solutions and strengthening delivery capabilities through services like doorstep delivery, curbside pickup, or buy online and pick up at the store.
AMZN shares have gained 3.8% in the year-to-date (YTD) period, underperforming the Zacks Internet – Commerce industry and the Zacks Retail-Wholesale sector’s growth of 9.5% and 5.1%, respectively.
From a valuation standpoint, AMZN stock is currently trading at a forward 12-month Price/Sales ratio of 3.28X compared with the industry’s 2.17X. AMZN has a Value Score of D.
The Zacks Consensus Estimate for second-quarter 2025 earnings is pegged at $1.32 per share, which has been revised upward by a penny over the past 30 days, indicating 7.32% year-over-year growth.
Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote
Amazon currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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