11:01 AM EST, 02/07/2025 (MT Newswires) -- Amazon.com ( AMZN ) reported "healthy" Q4 earnings, with operating income beating expectations by 11%, but issued weaker-than-expected Q1 guidance due to foreign exchange headwinds and capacity constraints, Wedbush said in a note Friday.

The brokerage said it believes the guidance is conservative, as Amazon ( AMZN ) has exceeded the high end of its operating income forecasts over the past eight quarters and a number of potential catalysts are expected to drive operating income in the intermediate term, including AI-driven AWS growth, improved automation, commercialization of Alexa AI capabilities, Project Kuiper monetization, and a potential Prime subscription price increase.

Looking ahead, Amazon's ( AMZN ) long-term profitability is expected to benefit from fulfillment optimization, higher-margin advertising, and Amazon Web Services expansion. However, near-term profit beats may be smaller due to increased investments in artificial intelligence initiatives and Project Kuiper, Wedbush said.

Amazon ( AMZN ) expects Q1 revenue of $151 billion to $155.5 billion and operating income of $14 billion to $18 billion, both below consensus, Wedbush said, adding that it has lowered Amazon's ( AMZN ) Q1 and 2025 revenue estimates by 2.4% and 1.6%, respectively, due to FX headwinds and Q1 guidance.

Wedbush maintained an outperform rating on Amazon ( AMZN ), with a $280 price target.

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