Feb 6 (Reuters) – Amazon.com (AMZN.O)
, opens new tab posted sales in last year’s final quarter that topped Wall Street estimates on Thursday, as a strong holiday shopping season boosted its retail business, but investors drove shares down due to weakness in the cloud computing unit.
Amazon’s shares fell 3.5% in extended trade after the report, erasing about $90 billion worth of stock market value.
The company’s cloud unit, Amazon Web Services (AWS), reported a 19% rise in revenue to $28.79 billion, falling short of estimates of $28.87 billion, according to data compiled by LSEG. Amazon joins smaller cloud providers Microsoft (MSFT.O)
, opens new tab and Google in reporting weak cloud numbers.
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.
Competitors Microsoft and Google parent Alphabet (GOOGL.O)
, opens new tab both posted slowing cloud growth in last year’s fourth quarter, sending shares lower. The companies, along with Meta Platforms (META.O)
, opens new tab, said costs to develop infrastructure for artificial intelligence software were behind sharply higher anticipated capital expenditures for 2025, a total of around $230 billion between them.
Still, Amazon’s retail business helped offset the cloud weakness, with the company reporting online sales growth of 7% in the quarter to $75.56 billion. That compared with estimates of $74.55 billion.
The company reported revenue of $187.8 billion in the fourth quarter, compared with the average analyst estimate of $187.30 billion, according to data compiled by LSEG.
Advertising sales, a closely watched metric, rose 18% to $17.3 billion. That compares with the average estimate of $17.4 billion.
Net income nearly doubled to $20 billion from $10.6 billion a year earlier. The Seattle retailer reported earnings of $1.86 per share, compared with expectations of $1.49 per share.
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Reporting by Deborah Sophia in Bengaluru and Greg Bensinger in San Francisco; Additional reporting by Noel Randewich in Oakland, California; Editing by Shounak Dasgupta and Matthew Lewis
Our Standards: The Thomson Reuters Trust Principles.
Greg Bensinger joined Reuters as a technology correspondent in 2022 focusing on the world’s largest technology companies. He was previously a member of The New York Times editorial board and a technology beat reporter for The Washington Post and The Wall Street Journal. He also worked for Bloomberg News writing about the auto and telecommunications industries. He studied English literature at The University of Virginia and graduate journalism at Columbia University. Greg lives in San Francisco with his wife and two children.
