Amazon's cloud unit AWS reports weaker-than-expected revenue development

Investors worried over first-quarter sales outlook

Amazon's retail company offsets cloud weakness with 7% online sales growth

By Greg Bensinger, Deborah Mary Sophia

Feb 6 (Reuters) - Amazon.com financiers drove shares down sharply on Thursday due to weak point in the retailer's cloud computing unit and lower-than-expected forecasts for first-quarter profits and classifieds.ocala-news.com profit.

Amazon's shares fell as much as 5% in trade after the fourth-quarter earnings report, removing about $90 billion worth of stock market worth, and were last down about 4.2%.

Amazon Chief Financial Officer Brian Olsavsky said he expected the capital investment run rate for this year to be approximately the like last year's fourth quarter when the business spent $26.3 billion. Amazon has actually boosted spending in particular to assist establish expert system software application.

The company's sales price quote for the first quarter failed to satisfy analysts ´ expectations, even if a negative impact of $2 billion from last year ´ s Leap Day is included. The company said it anticipates in between $151 billion and geohashing.site $155 billion, compared with the average estimate of $158 billion. The cloud system, Amazon Web Services, reported a 19% increase in profits to $28.79 billion, disappointing price quotes of $28.87 billion, according to information compiled by LSEG. Amazon joins smaller cloud providers Microsoft and wiki.dulovic.tech Google in reporting weak cloud numbers.

President Andy Jassy said the inconsistent circulation of computer system chips had actually kept back some growth in AWS. "We could be growing faster, if not for some of the constraints on capability, and they are available in the form of chips from our third-party partners coming a little bit slower than previously," he told financiers on a conference call.

The cloud weak point takes place as financiers have actually grown progressively restless with Big Tech's multibillion-dollar capital costs and are hungry for returns from large investments in AI.

"After extremely strong third-quarter numbers, this quarter the growth rates all missed. That's what the market doesn't wish to hear," said Daniel Morgan, senior portfolio manager at Synovus Trust. He said this is especially true after the emergence of brand-new rivals in artificial intelligence such as China's DeepSeek. Like its competitors, yewiki.org Amazon is investing heavily in artificial intelligence software development. At its annual AWS conference in December it flaunted brand-new AI software designs that it hopes will draw new business and consumer customers. Later this month, it is set to launch its long-awaited Alexa generative artificial intelligence voice service after delays over concerns about the quality and hb9lc.org speed, Reuters reported earlier today.

Competitors Microsoft and Google moms and dad Alphabet both published slowing cloud development in last year ´ s fourth quarter, sending out shares lower. The business, together with Meta Platforms, said costs to develop infrastructure for artificial intelligence software application contributed to sharply higher awaited capital investment for 2025, an overall of around $230 billion between them.

Amazon's retail business helped offset the cloud weakness, with the business reporting online sales development of 7% in the quarter to $75.56 billion. That compared to quotes of $74.55 billion.

Amazon forecast operating profit of $14 billion to $18 billion for the very first quarter of 2025, missing out on an average analyst estimate of $18.35 billion.

The company reported income of $187.8 billion in the 4th quarter, compared to the average expert price quote of $187.30 billion, according to information put together by LSEG.

Advertising sales, a carefully watched metric, rose 18% to $17.3 billion. That compares with the average price quote of $17.4 billion.

Earnings nearly doubled to $20 billion from $10.6 billion a year previously. The Seattle retailer reported revenues of $1.86 per share, compared to expectations of $1.49 per share.

(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)