Amazon shares slide as cloud growth falls behind Microsoft and Google
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Operating profit would be US$15.5 billion to US$20.5 billion in the quarter ending in September, compared with an average estimate of US$19.4 billion. Sales would be US$174 billion to US$179.5 billion, the company said on Thursday in a statement. Analysts, on average, expected US$173.2 billion.
CEO Andy Jassy is engaged in an AI infrastructure arms race with Microsoft and Alphabet that requires heavy spending on data centres. Both of those rivals earlier reported strong earnings showing they are benefiting from the AI boom.
Amazon spent a record US$31.4 billion on capital expenditures in the quarter, up about 90 per cent from the same period a year earlier. Chief financial officer Brian Olsavsky said that spending would be 'reasonably representative' of what the company planned for the second half of the year.
In the second quarter, revenue jumped 13 per cent to US$167.7 billion, handily beating estimates. But Amazon Web Services (AWS), the largest seller of rented computing power, gained a little more than 17 per cent to US$30.9 billion, just ahead of analysts' average estimate of US$30.8 billion.
Amazon CEO Andy Jassy. /TNS
The AWS sales increase was 'very disappointing' given the higher growth rates reported by Microsoft and Google, said Gil Luria, an analyst at DA Davidson. Microsoft's Azure posted a 39 per cent rise in sales during the three months ended in June. Google Cloud revenue rose by 32 per cent.
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