Amazon investors drove shares down sharply on Thursday attributable to weakness within the retailer’s cloud computing unit and lower-than-expected forecasts for first-quarter revenue and profit.
Amazon’s shares fell as much as 5% in prolonged trade after the fourth-quarter earnings report, erasing about $90 billion value of stock market value, and were last down about 4.2%.
Amazon Chief Financial Officer Brian Olsavsky said he expected the capital expenditure run rate for this 12 months to be roughly similar to last 12 months’s fourth quarter when the corporate spent $26.3 billion. Amazon has boosted spending particularly to assist develop artificial intelligence software.
The corporate’s sales estimate for the primary quarter failed to satisfy analysts’ expectations, even when a negative impact of $2 billion from last 12 months’s Leap Day is included. The corporate said it anticipates between $151 billion and $155 billion, compared with the common estimate of $158 billion.
The cloud unit, Amazon Web Services (AWS), reported a 19% rise in revenue to $28.79 billion, falling in need of estimates of $28.87 billion, in response to data compiled by LSEG. Amazon joins smaller cloud providers Microsoft and Google in reporting weak cloud numbers.
Chief Executive Officer Andy Jassy said the inconsistent flow of computer chips had held back some growth in AWS. “We might be growing faster, if not for among the constraints on capability, they usually are available the shape of chips from our third-party partners coming just a little bit slower than before,” he told investors on a conference call.
The cloud weakness comes at a time when investors have grown increasingly impatient with Big Tech’s multibillion-dollar capital spending and are hungry for returns from hefty investments in AI.
“After very strong third-quarter numbers, this quarter the expansion rates all missed. That’s what the market doesn’t wish to hear,” said Daniel Morgan, senior portfolio manager at Synovus Trust. He said this is especially true after the emergence of latest competitors in artificial intelligence corresponding to China’s DeepSeek.
Like its rivals, Amazon is investing heavily in artificial intelligence software development. At its annual AWS conference in December it showed off latest AI software models that it hopes will draw latest business and consumer customers. Later this month, it is ready to release its long-awaited Alexa generative artificial intelligence voice service after delays over concerns in regards to the quality and speed, Reuters reported earlier this week.
Competitors Microsoft and Google parent Alphabet each posted slowing cloud growth in last 12 months’s fourth quarter, sending shares lower. The businesses, together with Meta Platforms, said costs to develop infrastructure for artificial intelligence software were behind sharply higher anticipated capital expenditures for 2025, a complete of around $230 billion between them.
Amazon’s retail business helped offset the cloud weakness, with the corporate reporting online sales growth of seven% within the quarter to $75.56 billion. That compared with estimates of $74.55 billion.
Amazon forecast operating profit of $14 billion to $18 billion for the primary quarter of 2025, missing a median analyst estimate of $18.35 billion.
The corporate reported revenue of $187.8 billion within the fourth quarter, compared with the common analyst estimate of $187.30 billion, in response to data compiled by LSEG.
Promoting sales, a closely watched metric, rose 18% to $17.3 billion. That compares with the common estimate of $17.4 billion.
Net income nearly doubled to $20 billion from $10.6 billion a 12 months earlier. The Seattle retailer reported earnings of $1.86 per share, compared with expectations of $1.49 per share.
Amazon investors drove shares down sharply on Thursday attributable to weakness within the retailer’s cloud computing unit and lower-than-expected forecasts for first-quarter revenue and profit.
Amazon’s shares fell as much as 5% in prolonged trade after the fourth-quarter earnings report, erasing about $90 billion value of stock market value, and were last down about 4.2%.
Amazon Chief Financial Officer Brian Olsavsky said he expected the capital expenditure run rate for this 12 months to be roughly similar to last 12 months’s fourth quarter when the corporate spent $26.3 billion. Amazon has boosted spending particularly to assist develop artificial intelligence software.
The corporate’s sales estimate for the primary quarter failed to satisfy analysts’ expectations, even when a negative impact of $2 billion from last 12 months’s Leap Day is included. The corporate said it anticipates between $151 billion and $155 billion, compared with the common estimate of $158 billion.
The cloud unit, Amazon Web Services (AWS), reported a 19% rise in revenue to $28.79 billion, falling in need of estimates of $28.87 billion, in response to data compiled by LSEG. Amazon joins smaller cloud providers Microsoft and Google in reporting weak cloud numbers.
Chief Executive Officer Andy Jassy said the inconsistent flow of computer chips had held back some growth in AWS. “We might be growing faster, if not for among the constraints on capability, they usually are available the shape of chips from our third-party partners coming just a little bit slower than before,” he told investors on a conference call.
The cloud weakness comes at a time when investors have grown increasingly impatient with Big Tech’s multibillion-dollar capital spending and are hungry for returns from hefty investments in AI.
“After very strong third-quarter numbers, this quarter the expansion rates all missed. That’s what the market doesn’t wish to hear,” said Daniel Morgan, senior portfolio manager at Synovus Trust. He said this is especially true after the emergence of latest competitors in artificial intelligence corresponding to China’s DeepSeek.
Like its rivals, Amazon is investing heavily in artificial intelligence software development. At its annual AWS conference in December it showed off latest AI software models that it hopes will draw latest business and consumer customers. Later this month, it is ready to release its long-awaited Alexa generative artificial intelligence voice service after delays over concerns in regards to the quality and speed, Reuters reported earlier this week.
Competitors Microsoft and Google parent Alphabet each posted slowing cloud growth in last 12 months’s fourth quarter, sending shares lower. The businesses, together with Meta Platforms, said costs to develop infrastructure for artificial intelligence software were behind sharply higher anticipated capital expenditures for 2025, a complete of around $230 billion between them.
Amazon’s retail business helped offset the cloud weakness, with the corporate reporting online sales growth of seven% within the quarter to $75.56 billion. That compared with estimates of $74.55 billion.
Amazon forecast operating profit of $14 billion to $18 billion for the primary quarter of 2025, missing a median analyst estimate of $18.35 billion.
The corporate reported revenue of $187.8 billion within the fourth quarter, compared with the common analyst estimate of $187.30 billion, in response to data compiled by LSEG.
Promoting sales, a closely watched metric, rose 18% to $17.3 billion. That compares with the common estimate of $17.4 billion.
Net income nearly doubled to $20 billion from $10.6 billion a 12 months earlier. The Seattle retailer reported earnings of $1.86 per share, compared with expectations of $1.49 per share.
