Here's how Wall Street is reacting to Amazon's quarterly results:
Amazon's fourth-quarter results reinforces that the retail giant has the scale to invest aggressively, while still delivering margin expansion, BMO told investors.
"Amazon beat the high end of its operating income guidance in 4Q and while the 1Q guide was below consensus, short-term profit forecasting is always somewhat volatile. We continue to see a smoother uptrend on an annual basis and forecast +120bp of operating margin expansion in 2017 and +180bp in 2018, versus consensus of +110bp and +150bp, respectively," the firm said.
"This consumer outcome pushes us more toward believing there was underlying consumer weakness in Q4 in the U.S. Recall that we have been flagging parking lot data from Orbital Insight as a cautious indicator on consumer demand. However, there was the possibility that online demand was simply accelerating. This report seems to call that into question," JPMorgan said.
"While investment will weigh on margins near term, viewed through the lens of Amazon's extremely high returns on cash invested we believe the payoff of these investments will create considerable growth and value."
Goldman maintained its "buy" rating of Amazon.
Pac Crest said Amazon's earnings exceeded expectations, and viewed 22 percent revenue growth as very respectable considering the retail environment.
"[Foreign exchange] was a headwind, but we think better profitability was a function of the significant fulfillment center focus in 2016," Pac Crest said.
"Despite the short-term impact to shares, we are encouraged by Amazon's continued direct response to the innovator's dilemma, rather than rushing to expand margins," the firm said.
The firm said it found nothing in Amazon's results that was "thesis changing."
"Amazon is our 2017 top-pick, which has less to do with its current investment cycle and more to do with transformative changes that are happening across the consumer and enterprise landscapes, where Amazon's lead appears to be widening," Evercore said.
—CNBC's Anita Balakrishnan contributed to this report.