Latest news with #Jassy
Business Insider
an hour ago
- Business
- Business Insider
Amazon CEO Andy Jassy tried to calm concern about AI cloud competition. Wall Street isn't buying it.
On Thursday, Amazon CEO Andy Jassy scrambled to calm investor concerns over growth at the company's cloud and AI business. Wall Street wasn't buying it. Jassy fielded tough analyst questions about AWS growth and its position in the AI race. The stock tumbled 7% in after-hours trading, weighed down by disappointing profit guidance and Jassy's vague responses on AI. During the call, Jassy was asked about rival companies' "significantly faster cloud growth." AWS reported revenue growth of 17%, a far slower rate than Microsoft and Google's cloud businesses. Jassy said AWS has a much bigger revenue base, which makes comparing growth rates difficult. He also said AWS has better security and functionality than peers, while stressing its "pretty significant" leadership position in cloud market share. "It's a $123 billion annual revenue run rate business, and it's still early," Jassy said, referring to AWS's annualized sales figure. "It is a very unusual opportunity that we're very bullish about." Morgan Stanley analyst Brian Nowak followed up by asking about Wall Street's "narrative right now that AWS is falling behind" in AI, with concern about losing share to competitors. Jassy launched into a sprawling response, calling the AI market "early" and "top-heavy," dominated by a handful of popular models and apps. He pointed to AWS's lower-cost Trainium AI chip as a potential draw for customers seeking better price performance. He rattled off new agentic tools and developer features, then circled back to familiar territory, comparing today's AI shift to the early days of the original cloud boom, which AWS pioneered. "Remember 85% to 90% of global IT spend is still on-premises," Jassy said. "If you believe that equation's going to flip, which I do and we do, you have a lot of legacy infrastructure that you've got to move." Baird senior research analyst Colin Sebastian told BI that despite AWS's continued growth, the market's reaction is concerning. "Contrasting with Azure and Google Cloud Platform growth, it's hard to disprove the emerging Wall Street narrative that competitors are gaining ground and momentum from AWS," he said. During the call, Jassy added that AWS still has capacity issues across electricity, chips, and server components, with power being the "single biggest constraint." He said it will likely take several quarters to meet the demand shortage. One encouraging sign for AWS is that its cloud market share has barely budged over the past year. In the second quarter, the top 3 cloud providers' market share was virtually flat, with AWS at 30%, and Microsoft and Google each holding 20% and 13%, respectively, according to Synergy Research. Amazon's spokesperson declined to comment.
Business Insider
3 hours ago
- Business
- Business Insider
Amazon earnings recap: Stock falls on murky guidance and AI competition despite Q2 earnings beat
Net sales at Amazon grew 13% to $167.7 billion for the quarter ended June 30, above the $162 billion analysts polled by Bloomberg had expected. The company's earnings of $1.68 per share smashed estimates of $1.33. But Amazon said its operating income for the third quarter would be between $15.5 billion and $20.5 billion, potentially lower than analysts' estimate of $19.41 billion, souring the mood. During the company's earnings call, CEO Andy Jassy gave broad and lengthy responses to questions about how Amazon is responding to AI competition. Shares of the Seattle-based company sank 7% in after-hours trading on Thursday. Executives also fielded questions about tariffs during the call. Jassy said the company hasn't seen much effect in the first half of 2025 and pointed to the company's strong Prime Day results as evidence that shoppers are still placing orders despite the threat of tariff costs.
Axios
3 hours ago
- Business
- Axios
Amazon CEO says prices steady despite tariff risk
Amazon CEO Andy Jassy says consumer prices haven't surged despite trade headwinds — but noted Thursday that the future is unclear. Why it matters: The Seattle-based retail giant posted a huge quarter, which officials said was powered by a record Prime Day sale and strong consumer demand. What they're saying: "As we said before, it's impossible to know what will happen," Jassy said. "Where will tariffs finally settle, especially China? What happens when we deplete the inventory we forward bought, or that our selling partners forward deployed in advance of the tariffs going into effect?" Jassy asked. "If costs end up being higher, who will absorb them?" Jassy said despite the unknowns through the first half of the year, the company hasn't "yet seen diminishing demand, nor prices meaningfully appreciating." Between the lines: Jassy says tariffs' effect on retail prices and consumption has been "misreported" — but notes uncertainty looms once pre-tariff inventory runs out.
CNBC
9 hours ago
- Business
- CNBC
Amazon earnings primer: Why AI and tariffs are key to the second quarter
Amazon will report second-quarter results after the market close Thursday. Here's what analysts surveyed by LSEG are expecting: Wall Street is also looking at other key revenue metrics: The company spooked investors in May when it warned in its earnings report that "tariff and trade policies," as well as "recessionary fears," could weigh on second-quarter results. Amazon CEO Andy Jassy said at the time that "none of us knows exactly where tariffs will settle or when." Jassy later said the company hasn't seen "any attenuation of demand at this point" due to tariffs and that Amazon has taken steps to keep prices steady on its site. President Donald Trump's unpredictable tariff agenda primarily poses a threat to Amazon's sprawling e-commerce business, which accounts for the bulk of its sales. The core online stores unit is expected to post $58.98 billion in sales, according to StreetAccount. Wall Street is projecting seller services revenue to reach $38.7 billion during the quarter. Several analysts said the tariff and geopolitical backdrop for Amazon has become more manageable in recent months, which is one of several reasons they're optimistic about the company's second-quarter report. "Through the quarter, the US consumer backdrop has remained supportive as tariff concerns wane and consumers continue to spend," analysts at Deutsche Bank wrote in a July 22 research note. The firm has a buy rating on Amazon's stock. Trump's tariffs may be giving Amazon a boost, to some extent. The Deutsche analysts said it's "become abundantly clear" that Amazon has gained a greater share of the U.S. e-commerce market in the face of diminished competition from ultra-cheap Chinese online retailers Shein and Temu, which is owned by PDD Holdings. Both companies have struggled to preserve their grip on American shoppers after the Trump administration ended de minimis, a trade exemption that allowed low-value shipments to enter the country duty-free, and instituted higher tariffs on Chinese imports. Amazon's third-quarter guidance will give a view into whether the company expects tariff risks to continue. Analysts are projecting revenue to reach $173.3 billion in the current quarter. Outside of retail, investors will be keeping a close eye on Amazon's cloud business. Revenue at AWS in the first quarter grew 17%, which fell short of analysts' estimates and was the slowest growth in a year. Analysts are projecting about the same year-over-year growth for the second period. Jassy said in May that the cloud business would have grown faster if it weren't for capacity constraints caused by shortages of AI chips and other components. Amazon has pledged to spend up to $100 billion this year, largely on AI-related investments for AWS. Wall Street will be paying attention to whether Amazon reaffirms or boosts that number. AI and cloud competitor Google last week upped its capital spend to $85 billion this year as part of its second-quarter earnings. Like other major tech companies, Amazon has been laser-focused on AI. During the quarter, Amazon began releasing an AI-upgraded version of its Alexa voice assistant and it launched a new agentic AI group in its skunkworks research and development unit. The technology is also transforming Amazon's workforce. In a June note to staff, Jassy said the company's corporate employee base will shrink in the coming years as it adopts more generative AI tools and agents. "It's hard to know exactly where this nets out over time, but in the next few years, we expect that this will reduce our total corporate workforce," Jassy wrote. Amazon shares have lagged those of its tech peers this year despite its heavy investments in AI. Amazon's stock is up 5.4% year to date, while shares of Meta and Microsoft have climbed roughly 20% over the same stretch. Apple, which has struggled with its AI development, is down about 15.5% so far this year.
Yahoo
24-07-2025
- Business
- Yahoo
Think It's Too Late to Buy Amazon? Here's the Biggest Reason Why There's Still Time.
Key Points Cloud services are still a small percentage of Amazon's information technology (IT) spend. Amazon is investing more than $100 billion this year to develop its artificial intelligence (AI) platform. 10 stocks we like better than Amazon › Amazon (NASDAQ: AMZN) has been one of the best investments money can buy over its nearly three decades on the stock market. It's up more than 233,000% since its first-day closing price, and if you'd invested $1,000 then, you'd have more than $2.33 million today. But the growth story isn't finished. There are many reasons to believe Amazon stock can soar some more. Here's the biggest reason why. There is a shift to the cloud One theme CEO Andy Jassy mentions at almost every opportunity is the shift to the cloud. Amazon Web Services (AWS) is Amazon's cloud solutions business, and it's the largest in the world, with 30% of the market, according to Statista. It's one of the company's fastest-growing segments, up 17% in the 2025 first quarter, and it's responsible for most of Amazon's operating income -- 63% in the quarter. However, according to Jassy, cloud services are still a small percentage of the company's information technology (IT) spend. Jassy says that 85% to 90% of IT spend is still on the premises, but over the next 10 to 20 years, that's going to switch. If clients were already starting to make the switch before the advent of generative artificial intelligence (AI), they're even more interested now, because the cloud is where there are the greatest opportunities to engage with and benefit from AI. That's a natural growth driver for Amazon, and even more important for the bottom line. Amazon is investing more than $100 billion in developing its AI business in 2025 alone to offer the most competitive platform and maintain its lead, and it's well-positioned to benefit from the shift to the cloud over the next decade or two. That makes its stock a buy. Do the experts think Amazon is a buy right now? The Motley Fool's expert analyst team, drawing on years of investing experience and deep analysis of thousands of stocks, leverages our proprietary Moneyball AI investing database to uncover top opportunities. They've just revealed their to buy now — did Amazon make the list? When our Stock Advisor analyst team has a stock recommendation, it can pay to listen. After all, Stock Advisor's total average return is up 1,034% vs. just 180% for the S&P — that is beating the market by 853.75%!* Imagine if you were a Stock Advisor member when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $641,800!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,023,813!* The 10 stocks that made the cut could produce monster returns in the coming years. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy. Think It's Too Late to Buy Amazon? Here's the Biggest Reason Why There's Still Time. was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
