Time: 2024-08-02
Amazon 's ( AMZN ) stock experienced a significant drop in after - hours trading following the release of its third - quarter sales guidance . The company reported sales estimates that were lower than what analysts had predicted , causing the stock to fall by as much as 6 % . Amazon provided guidance for sales in the range of 54 billion to 58.5 billion , which fell short of the 58.43 billion expected by analysts . The company 's third - quarter report highlighted a wave of Big Tech results that have been cautioning investors about massive AI spending . Despite beating earnings per share estimates and nearly doubling profits from the previous year , investors focused on the weaknesses in the report.
One of the positive aspects of Amazon 's report was the performance of its cloud computing business , Amazon Web Services ( AWS ) . AWS generated 6.3 billion in revenue , surpassing the 6 billion expected and showing significant growth compared to the previous year . Amazon 's CFO , Brian Olsavsky , mentioned that AWS is on track to generate over 05 billion annually . The company is heavily investing in infrastructure to support the rapid deployment of new AI technologies and cloud services , with capital expenditures exceeding 0 billion in the first half of the year.
Despite the strong performance of AWS , Amazon is facing challenges in its e - commerce business . Competition from companies like Temu and Shein , specializing in low - cost goods , has intensified , leading Amazon to develop a discount digital storefront to compete in the fashion and lifestyle market . The company experienced softer consumer spending in the quarter , positioned between two major sales events , which impacted its overall growth . The need to adapt to changing consumer trends and offer competitive deals remains a priority for Amazon.
Looking ahead , Amazon forecasted revenue growth of 8 % to 11 % year over year for the current quarter , falling slightly below analyst estimates . The company is anticipating increased operating income for the third quarter , aiming to address challenges in its core retail business and capitalize on the growth of AWS . The market response to Amazon 's report highlighted the importance of balancing revenue growth , cloud computing performance , and competition in the e - commerce landscape . As Amazon continues to navigate these challenges , investors will closely monitor the company 's strategic initiatives and financial performance to gauge its long - term growth potential.
Business
