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Amazon’s stock falls on light guidance and third successive cloud revenue miss
- Amazon.com Inc. posted better-than-expected results in its first-quarter earnings but gave mixed guidance due to uncertainty from U.S. tariffs.
- The company's cloud business, Amazon Web Services (AWS), fell short of revenue expectations for the third consecutive quarter, causing a more than 3% drop in stock price after hours.
- Despite exceeding earnings per share estimates at $1.59, revenue of $155.67 billion, and net income of $17.73 billion, Amazon is cautious about future performance.
- AWS generated sales of $29.27 billion, missing analyst forecasts, but operating income of $11.55 billion exceeded expectations, benefiting from increased margins.
- The company faces challenges from Trump's tariffs affecting consumer demand, leading to uncertain future projections.
- Amazon's advertising revenue grew 19% to $13.92 billion, surpassing expectations, providing some relief amid the uncertain market conditions.
- CEO Andy Jassy mentioned the company's diverse seller base and ability to offer competitive prices could offset the impact of tariffs on customers.
- Despite lower guidance for the next quarter, Amazon is optimistic about its ability to navigate the challenges and capitalize on opportunities in the market.
- Investors are closely monitoring Amazon's performance, especially in light of the evolving trade policies and their potential impact on the company's operations.
- AWS is focusing on new initiatives like a video game streaming service and AI business to drive future growth amid intensifying competition in the cloud market.
- Overall, Amazon's stock has experienced a downswing of over 13% year-to-date, reflecting market concerns over the company's outlook and potential risks.
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