Amazon’s stock fell in after-hours trading on Thursday after the tech giant reported disappointing results from its cloud computing division and issued a cautious outlook for the upcoming quarter, prompting fresh concerns about its artificial intelligence (AI) competitiveness and exposure to global trade tensions.
Amazon Web Services (AWS), the company’s flagship cloud business and a core pillar of its AI strategy, posted first-quarter revenue of $29.27 billion, missing Wall Street’s expectations of $30.9 billion. While AWS revenue grew 16.9% year-on-year, this marks its slowest pace in over a year and falls short of the explosive growth recently reported by rivals.
The tepid AWS results stood in contrast to Microsoft’s Azure, which posted stronger-than-expected growth earlier this week, underscoring the competitive pressure Amazon faces in the AI and cloud market. Similarly, Meta Platforms also beat forecasts, powered by AI-enhanced advertising performance.
Amazon shares initially fell as much as 5% in extended trading before trimming losses to 3.1%, closing at $184.32. Analysts attributed the drop to a combination of slower AWS growth, weaker-than-expected forward guidance, and broader concerns about Amazon’s AI trajectory.
The company projected second-quarter operating income between $13 billion and $17.5 billion, missing consensus estimates of $17.7 billion. While Amazon’s advertising and e-commerce divisions posted robust gains, these positives were overshadowed by cloud concerns and macroeconomic headwinds.
Adding to investor unease are mounting trade tensions between the U.S. and China, which are threatening Amazon’s retail operations—the company’s largest revenue source. Amazon came under political scrutiny after reports claimed it considered warning customers about potential price hikes due to new U.S. tariffs, though the company has publicly denied this.
The report highlights the uneven landscape Big Tech faces amid AI investments and trade challenges. While companies like Microsoft and Meta have surged on AI optimism, Amazon’s results suggest that maintaining leadership across multiple sectors remains a complex balancing act.
